Plastics: Today’s Market Summary

Dec 30, 2022

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PP granules

This week, the domestic polypropylene market was weak, and the price center moved downward. As of this Thursday, the average weekly price of East China wire drawing was 7731 yuan/ton, down 123 yuan/ton compared with the average price of the previous week, or 1.57%, which turned from up to down compared with the previous week. The price difference between wire drawing regions is not prominent, and for varieties, the price difference between wire drawing and low melting copolymerization continues to increase. PP maintenance devices increased this week, and there was little pressure on the market supply side. However, the downstream demand is still slow to follow up. In addition, the production links and logistics transportation of factories in various regions are affected by the shortage of labor, and the starting load is further reduced. Downstream demand is weaker than the same period of previous years, which also leads to insufficient market confidence. On the whole, the polypropylene market was obviously suppressed by demand this week, and the price fell under pressure.

Forecast: The domestic polypropylene market will fluctuate and decline this week, and the market is expected to be weak next week. Taking East China wire drawing as an example, the expected price range is 7650-7950 yuan/ton. In the near future, Sinopec has maintained the status of de stocking, and the inventory is at a low level. However, the petrochemical inventory usually accumulates to a certain extent after the festival, and the overhaul devices will decrease next week. It is expected that the pressure on the supply side will increase slightly; Downstream demand is expected to be sluggish and hard to change. In addition to the low consumption season, the production and logistics transportation of factories in various regions are also affected by the shortage of labor. Some factories also said that they have plans to open holidays in advance this year. Based on the above, the market is expected to be weak next week.

PVC

PVC prices rose first and then fell this week, and the weekly average price fell slightly month on month. The average weekly price of calcium carbide PVC was 6197 yuan/ton, down 33 yuan/ton from last week, or 0.53%. The price trend turned from up to down. There are two main factors affecting the PVC price this week. On the one hand, some regions have put forward the policy of real estate easing to boost the market mentality in stages, and the price rose slightly at the beginning of the week; On the other hand, with the gradual weakening of the macro impact, the fundamentals once again dominate. The downstream demand side has entered a holiday state, and the demand is weak and there is an expectation of further weakening. The operating load rate of the PVC industry has increased slightly. The PVC social inventory is expected to have a turning point this week, and the spot market price will be weak after rising. In addition, some manufacturing enterprises still have new export orders, which plays a supporting role in market prices.

Forecast: The fundamentals are expected to weaken further next week. On the one hand, the supply is expected to increase steadily, and there are few enterprises undergoing maintenance. The PVC load rate may remain at a medium level; On the other hand, the demand is expected to weaken further. The orders of product enterprises are not good. Some of them plan to have holidays around the New Year’s Day holiday. The rigid demand is expected to weaken. It is expected that the social inventory will enter the accumulation trend. However, there is still some uncertainty in the export side. It is necessary to further observe the changes in the external price. In addition, the macro positive impact is limited, and the market mentality is more cautious. It is expected that the PVC price will fluctuate slightly next week, and the price range of East China SG-5 may be 6100-6200 yuan/ton.