Plastics: Summary of this week’s market and future prospects

Sep 08, 2023

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PP particles

The domestic PP market price continues to rise today, with a range of 20-30 yuan/ton. The upward trend of futures continues to boost the mentality of the spot market, with some upstream production enterprises raising factory prices and strengthening cost support. Traders continue to chase up their offers, and downstream factories are still able to trade at low prices in the morning. As prices rise, the trading atmosphere has eased, and the overall transaction is average. Today, the mainstream wire drawing prices in North China are between 7700 and 7850 yuan/ton, in East China they are between 7770 and 7880 yuan/ton, and in South China they are between 7850 and 7950 yuan/ton.

Forecast: Today’s PP futures fluctuate at high levels, with spot prices stabilizing and rising slightly. In the near future, although high spot prices have resisted, there has been significant resistance in the follow-up of transactions. However, the fundamental changes in PP are limited, and although new production capacity has been launched, the supply pressure at the forefront of the market is average. Downstream factory orders and profits have been slow to recover, but inventory is low and there is still a demand for restocking. In addition, recent upstream raw material prices have continued to strengthen, PP cost support is strong, and expectations for (gold nine silver ten) are still maintaining market confidence. Based on this, Zhuochuang Information expects the PP market to consolidate at a high level tomorrow, and high priced transactions will be hindered. Taking East China wire drawing as an example, the mainstream price is expected to be between 7770-7880 yuan/ton.

PVC powder

The low price of calcium carbide PVC market in East China has decreased, and the trading volume is average. Futures fluctuated around the 6550 point, with traders offering a slight increase in the low price at one go. Some traders continued to sell at low prices, and downstream inquiries and procurement enthusiasm were not high, resulting in overall poor trading performance. Today, the comprehensive evaluation of the mainstream trading range of the East China 5 spot exchange warehouse is between 6400-6470 yuan/ton, with some even higher. The quotation for PVC produced by East China Ethylene Process has slightly increased, resulting in tepid trading. Send to Changzhou Qilu 1000 for reference at 6700 yuan/ton, Liancheng 1000 for reference at 6770-6830 yuan/ton, and Ningbo Dagu 1000 for self pickup reference at 6550 yuan/ton.

Forecast: Today’s PVC market is undergoing a narrow consolidation, with high prices leading to poor transactions. The recent rise in PVC prices is mainly due to strong macro expectations and an improved commodity atmosphere. However, there is currently little change in the fundamentals of PVC, and high downstream prices are resistant, resulting in weak spot trading in the market. Therefore, it is expected that spot trading will continue to have some resistance to rising inventory. The PVC market may continue to consolidate tomorrow, and the mainstream trading range of the East China SG-5 may be between 6380-6470 yuan/ton.

PE

This week, the domestic polyethylene market experienced narrow fluctuations in prices, with a slight upward shift in the price center. During the week, crude oil prices continued to rise, while supply of some varieties remained tight, boosting market participants’ confidence in trading. Petrochemical and traders have a strong willingness to sell at high prices, but the enthusiasm of factories to receive goods is not high. They adhere to the principle of using and taking at will, which is difficult to provide strong support for the spot market, and the price increase is limited. The current mainstream linear price ranges from 8350 to 8780 yuan/ton, with increases ranging from 80 to 180 yuan/ton; High pressure mainstream prices range from 9150 to 9850 yuan/ton, with increases ranging from 50 to 400 yuan/ton; The prices of various low-pressure varieties have mostly increased, with fluctuations ranging from 20 to 520 yuan/ton.

Forecast: It is expected that the domestic PE market will absorb recent gains next week, with mainstream LLDPE prices ranging from 8400 to 8800 yuan/ton. The high volatility of oil prices, coupled with macro positive expectations, has led to an increase in market bottom support expectations. In terms of supply, the planned maintenance loss of domestic PE next week is 56200 tons, a decrease of 4000 tons compared to the previous week. Among them, the loss of LLDPE is 32300 tons, and there is still an expected increase in imports upon arrival, resulting in an overall increase in supply; In terms of demand, the traditional peak season and finished product inventory consumption have led to an expected increase in downstream operating load. However, with high downstream prices and slow follow-up of plastic product prices, factory purchasing willingness has declined, and market transaction activity has decreased. Overall, there will be support at the bottom of the domestic PE market next week, and there will be pressure to push up the market. Under the game pattern, it is possible to digest recent gains or mainstream trends. At the same time, it is not ruled out that some high prices and profits will promote trading.