Styrene fell six times in a row, causing ABS to plunge 600 yuan! PP PE PVC was also a dismal green, falling 190 yuan! What about the peak season?
Weekly Crude Oil Review
Positive factors (mainly): The supply tightening atmosphere brought about by OPEC + production cuts continued, compounded by improved economic expectations in Asia, and oil prices rose at the beginning of the week. The Federal Reserve kept interest rates unchanged as widely expected, but it is expected to further raise interest rates before the end of the year. Traders took profits and European and American crude oil futures fell moderately.
The editor has something to say: Slide to view the weekly market analysis and outlook forecast of PP PE ABS PVC~
PP - Callback after rise, limited decline
This week, the domestic PP market price fluctuated slightly, and the mainstream brand market fluctuated by 50-150 yuan/ton.
Market Analysis
Crude oil is strong and costs continue to be strong, driving the disk to open higher and spot to follow suit. The demand side maintains rigid demand, the incremental space is limited, and the basis is weak. The current market supply and demand is stable, and the inventory level of downstream raw materials is still not high. Superimposed on the peak demand season cycle and double-saving replenishment warehouse support, the actual pressure is relatively limited. Overall, the cost side is still the focus of the market in the near future. The new production capacity is concentrated, the pressure on the PP supply side is increasing, and the space for near-term adjustment may be limited.
Upstream raw materials
Propylene: This week, the market price of propylene in Shandong, fluctuated slightly. The main influencing factor is the supply and demand side. At the beginning of the week, the trend of PP disk fell, which suppressed the market to a certain extent. The wait-and-see mood of downstream factories intensified, and the offer of propylene companies fell. During the week, as the price of propylene fell back to a low level, the profitability of PP rebounded, which drove the shipment of propylene and propylene companies to improve, and the willingness of the offer to support the price increased. However, at the end of the cycle, it was suppressed by different regional shipments and the decline of PP disk, and the market was mostly consolidated.
Forecast
Cost side: oil system and PDH system, cost storage is loose, crude oil seasonal demand slows down, high storage is at risk of falling, and PDH prices are under pressure in line with the increase in domestic supply of propane in oil prices. Short-term methanol cost support is relatively stable, and long-term start-up raises the risk of high price loosening in supply increments.
Supply side: As of September 22, the inventory of the two oils was 575,000 tons, which was greatly reduced. PP supply increased slightly during the week, and new expansion devices were added one after another. Coupled with the resumption of production by some maintenance enterprises, the short-term supply of the market increased accordingly. In the short term, the maintenance enterprises were intensive, which relieved some supply pressure. It is expected that the new volume pressure will gradually become prominent in October. New capacity expansion, Ningbo Jinfeng 800,000 tons PP plant debugging device and process, has produced powder, and plans to produce pellets at the end of the month; Ningxia Baofeng Phase III 500,000 tons/year PP plant qualified products on September 20. (off-air)
Demand side: The recovery of new orders in the downstream is limited, and the marginal demand is slightly followed up. Plastic weaving faces some demand follow-up from the northern autumn harvest; the Mid-Autumn Festival and National Day holidays drive some packaging demand, but the film factory has decreased its willingness to replenish warehouses recently due to the high price of raw materials to compress profits; the start of pipe materials has resumed slightly recently, and the liberalization of real estate purchase restrictions in various places has a certain driving force. Short-term marginal demand is mainly supported by stable support. (Preference)
Overall, on the macro side, the central bank's RRR cut and local real estate purchase restriction policies are good for market demand; the cost side faces the risk of high loosening in the short term (oil prices fall), and the new capacity expansion on the domestic supply side has been increased one after another, which has an impact on high-priced raw materials. It is expected that the price of PP market will fall slightly next week, but the decline is limited. East China wire drawing is expected to remain at 7850-7950 yuan/ton.
ABS - Raw material is short, continues to fall
This week, the domestic ABS market price continued to decline, and the market price of mainstream brands fell by 100-300 yuan/ton.
Market Analysis
This week, the price of styrene raw materials has fallen, the inventory of ABS channels is high, and the market transaction is weak. In addition, the price of styrene has fallen, and the cost support has declined. This week, Lihuayi lowered its ex-factory quotation, and the market followed suit. The market transaction is average, and the trend of styrene has a great impact on the trend of ABS prices. It is recommended to pay close attention to the dynamics of raw material prices.
Upstream raw materials
Styrene: The styrene market has corrected sharply this week. This week, crude oil rose and then corrected, and styrene followed suit. On the supply and demand side, supply increased slightly, while the three major downstream demand also increased slightly, and supply and demand did not weaken significantly. The operability of styrene prices to continue to rise during the week was limited. Bulls stopped pulling up and took the initiative to reduce their positions before the warehouse limit period, resulting in continuous pullbacks in styrene prices during the week.
Outlook forecast
Cost side: It is expected that the international oil price may fall next week, but the bottom support is still strong. Styrene: Although pure benzene has followed the decline, under the influence of current inventory and expected supply and demand, the further follow-up and decline of pure benzene is limited, and the cost support will be gradually reflected. From the supply and demand side, the National Day holiday is approaching, and there are expected to be signs of weakening, but the price of styrene has fallen to the current level, and the intention of downstream factories to stock up and purchase goods is more likely to be mobilized. In addition, some empty orders at the end of the month may have the intention to make up orders. Overall, if the price of styrene further weakens, it will drive the buying gas to strengthen, so the space for the price of styrene to continue to weaken may be limited. There is a possibility of a slight rebound after the decline. It is expected that the spot
Demand side: In terms of home appliances, domestic sales declined in September and exports increased. The Canton Fair and the global high temperature weather promoted the export of refrigerators and air conditioners. However, after the completion of the overseas market replenishment order, subsequent exports are still under pressure. The production schedule of refrigerators and air conditioners decreased month-on-month, and the production schedule of refrigerators may still be at a high level. According to incomplete statistics, the output of refrigerators planned to be 6.26 million units in September 2023, + 1.95% month-on-month and + 20.27% year-on-year. (General)
From January to July in 23, the industry as a whole, air conditioners, refrigerators, and production increased by 3.69% -19.4% year-on-year, and the overall end point demand increased. However, due to the large number of new ABS devices put into production in 23 years, ABS prices were difficult to rise.
Supply side: In September, the factory started construction stably; Zhenjiang Qimei 800,000 tons/year device AS control room needs to be upgraded, the device will start construction from mid-September, and the overall ABS device will start to reduce the load to about 60%. (General)
Overall: the current styrene price correction, ABS cost support has weakened, the market transaction rigid demand is weak, and some traders have corrected and sorted out. If there is still no obvious starting volume before the holiday next week, the price does not rule out the possibility of continuing to decline. It is expected that the domestic ABS market price will continue to decline next week.
PE - Stocking ahead, narrow range down
This week, the domestic PE market was mixed, with fluctuations of 20-200 yuan/ton.
Market Analysis
During the week, the petrochemical enterprises continued their intention to raise prices, but the downstream had a certain resistance to some high-priced sources, resulting in some prices in the market falling. For the types with tight supply in the market, prices rose slightly. Near the holiday, due to factors such as factory holidays, most downstream factories are stocking up in advance, and the stocking efforts will weaken next week. It is expected that the price of polyethylene goods may fall slightly next week, and the price of mainstream 7042 in North China is about 8250-8400 yuan/ton.
Upstream raw materials
Ethylene: September 22 Asian ethylene CFR Northeast Asia average price of $871/ton; CFR South East Asia average price of $866/ton.
Forecast
Supply side: In terms of equipment, next week, Bora Leander, Yulin Petrochemical, Lanzhou Petrochemical and other plants will start as planned. It is expected that the impact of maintenance will be 23,900 tons, which is less than this week's maintenance. Next week, the sample inventory of Chinese polyethylene producers is expected to be about 360,000 tons, and the inventory trend will continue to decline.
Demand side: It is expected that the overall operating rate of various industries downstream of PE will be + 0.47% next week. The demand for agricultural film has gradually entered the peak season, and orders will continue to increase. There is still room for improvement in the start of agricultural film enterprises, and the digestion speed of raw materials is accelerated. Near the holiday, due to factors such as factory holidays, and in addition to some rigid demand for daily chemical packaging, other end point products have been ordered in advance.
Cost side: Crude oil: It is expected that international oil prices may have room to decline next week, but the bottom support is still strong. Coal: At present, the prices of ports and origin are rising simultaneously, and the traders around the origin are more active in operation. There is a certain support for coal prices in the short term. Overall, the trend of raw materials next week is reflected in that the cost support for oil production has weakened, and the cost support for coal production has increased.
Overall: crude oil prices may fall next week, but coal prices are expected to rise, and polyethylene spot prices are still supported by the cost side; the overall operating rate of PE downstream industries is expected to be + 0.47%, approaching the holiday. Due to factors such as factory holidays, most downstream factories have stocked up in advance. Next week, stocking efforts will weaken. It is expected that production enterprises will actively digest inventories next week. It is expected that the spot price of polyethylene may fall slightly next week, and the price of mainstream 7042 in North China is about 8250-8400 yuan/ton.
PVC - Oscillation down, range volatility
This week, the domestic PVC market price fluctuated and fell, and the mainstream market price fell by 50-190 yuan/ton.
Market Analysis
Upstream raw materials
Calcium carbide: This week, the domestic calcium carbide market prices fell sharply. The mainstream trade price in Wuhai was 2,800 yuan/ton. Some enterprises have accumulated inventory and are actively shipping. Recently, the cost side of calcium carbide has shown a strong trend, especially the price of blue charcoal has continued to rise, and there is an expectation of continued strength. With the reduction of ex-factory prices and the increase in blue charcoal prices, enterprises have turned from profits to losses, and load reduction has occurred one after another. At present, transportation vehicles continue to be tight, and some downstream stocking is insufficient. The enthusiasm for purchasing is not reduced. It is expected that the market will enter the consolidation stage next week. Under the pressure of costs, the load reduction situation at the end of the month has increased. <
Vinyl chloride: The price of vinyl chloride monomer in Asia is stable at US $700/ton CFR Far East, the supply of vinyl chloride monomer is tight, but the bearish atmosphere in the downstream PVC market is putting pressure on prices. The quotation of mainstream vinyl chloride enterprises in East China is 5550-5650 yuan/ton, and the actual order is negotiated.
Forecast
Cost side: crude oil and coal are strong and optimistic, short-term calcium carbide is bearish, coal conduction is expected to gradually support calcium carbide prices after mid-October, ethylene is expected to be stable, and the cost bottom exists.
Supply side: Routine maintenance will decrease in the later stage, and it is expected that the start of PVC production enterprises will continue to pick up, and output will continue to increase; the supply in other parts of Asia will be normal in September after maintenance; the United States is expected to end all maintenance by the end of October, and the long-term supply will increase.
Demand side: The impact of real estate policies on the end point products industry is still slightly slow. Demand is divided by industry, with improvements in flooring and pipes; the increase in domestic demand is slightly larger in soft products and daily necessities. However, enterprises are resistant to high prices, and some receiving goods are still the mainstream rhythm in view of the expectation that prices are not high. The industry sees that the start-up orders of small and medium-sized enterprises are poor. Some large enterprises rely on foreign trade or cash flow problems. The start-up is not high, and other medium-sized and large-scale industries perform well.
Export: Taiwan Formosa Plastics prices after the introduction of the transaction is difficult, Japan and South Korea quotations are still expected to be lowered, demand counter-orders are low and expectations are weak, the overall shipment is average. Domestic export prices do not dominate, even if the price for volume in the later stage, it is expected that exports will still be difficult to increase before October.
Overall: Next week, the maintenance scale of PVC production enterprises will continue to decrease, and the output is expected to increase month-on-month; the market is still bearish after the introduction of Formosa Plastics prices. It is expected that the price of Japanese and Korean dollars will still fall, and the domestic export price will be suppressed to below $780. Crude oil and coal are supported, but there is still a slight room for decline in calcium carbide, and the cost support of PVC will weaken under the downward trend. Overall, the market supply is high, the cost is low, and the export is weak, but the downstream demand improves month-on-month. It is expected that the price range of PVC market will fluctuate next week, and the price of East China Calcium Carbide Method Type 5 will
