Returning from spring break, the news of price increase started to swipe the screen, and the price of styrene increased! ABS price increase! PP price increase! PE price increase…The increase is so fast that people are caught off guard. The upward road seems to have been opened up, just waiting for Jun to gallop freely. So, what are the forces that helped the polyethylene market usher in a good start? Let us reason from top to bottom.
First, the cost of crude oil rebounded strongly. International crude oil prices have accelerated their rebound. During the Chinese Lunar New Year, it once hit a new high in more than a year. The severe cold weather in Texas, the largest oil-producing state in the United States, caused the state’s oil fields to suspend production, and crude oil inventories fell unexpectedly. In addition, factors such as Saudi production cuts and the easing of the global epidemic have jointly supported the surge in oil prices. After the holiday, prices in the upstream market showed a general upward trend, bringing long-lost benefits to the market.
Second, due to my country’s high degree of dependence on foreign PE, changes in overseas resource supply have an important impact on domestic market prices. Affected by the extreme cold weather of winter storms, many giant polyolefin producers in the United States, such as Exxon Mobil, Lyondell Basel, and Ineos, closed their factories and announced force majeure. According to statistics, under the cold wave, the shutdown capacity of PE equipment in the United States accounts for about 49.64% of its total capacity, and the amount of polyethylene exported from the United States to my country in 2020 is about 1.133 million tons. The production capacity of polyethylene plants in the United States is difficult to recover in a short period of time, and the amount of polyethylene entering the Chinese market may continue to decrease. In addition, South Korea is about to enter the maintenance season, coupled with the impact of the Japanese earthquake, and the tight supply situation in the import market has contributed to the steady development of the domestic polyethylene market. Escort.
Third, the domestic futures market closed up on a large scale. Polypropylene rose by more than 7%, and polyethylene rose by more than 8%. Plastic futures rose sharply on the first day after the holiday. In addition to the cost of crude oil, the domestic epidemic situation achieved a smooth transition during the Spring Festival. In addition, the local Chinese New Year promoted the recovery of industrial output and consumption. Multiple factors laid the foundation for the rise of energy and chemical products. Price basis.
Fourth, petrochemicals: driven by crude oil and futures, petrochemical companies took advantage of the trend to raise ex-factory prices, and the market trading atmosphere has improved significantly compared with the previous period. Driven by this, the market may continue to fluctuate upwards in the short term. In the future, upstream dynamics and financial aspects will still be the key factors affecting petrochemical ex-factory prices.
Fifth, returning after the holiday, due to the storage of the Lunar New Year holiday, the inventory of plastic oil and oil on February 18 was 940,000 tons, an increase of 65% from February 9, but the inventory fell by 25 compared to the first working day after the Lunar New Year holiday last year. %. On the whole, the inventory pressure after the Spring Festival holiday this year is not as good as in previous years and it has also played a role in boosting market prices.
Sixth, the downstream resumption of work is expected to be better. During the Spring Festival, the domestic epidemic situation was temporarily effectively controlled, and the local Chinese New Year policy has alleviated the difficulty of rework caused by the resumption of production in previous years. This year, the resumption time of downstream production companies is mostly concentrated on the sixth to the tenth day of the year, which is earlier than previous years, especially in the plastic film industry. The current start of construction has already recovered significantly. In the market outlook, industries such as mulching film and pipe materials will enter the demand season, which may provide certain support to the market.
The recovery of the polyethylene market after the holiday is gratifying. At present, both the fundamentals and the cost are strong. In the short term, market prices may be strong. However, the phenomenon that the entire industry chain exerts its strength from top to bottom is rare and lacks continuity. Traders should still treat it rationally to avoid unnecessary losses due to blind operations.
Shenzhen World Packing Industrial Ltd
Stretch Film & Packing Tape Specialist , Top China manufacturer
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[Cable Network News] On Friday, the main polyethylene contract L2105 of Dalian Commodity Exchange opened at 8590 yuan/ton, the highest hit 8825 yuan/ton, the lowest dropped 8520 yuan/ton, and closed at 8795 yuan/ton, up 360 yuan/ton. An increase of 4.27%. The total number of hands is 547,335 and the position is 380,137. Spot market:
The domestic PE market continued its upward trend. In terms of petrochemicals, the East China region rose 200-300 yuan/ton, and the high-pressure/linear guide price was 100 yuan/ton higher than the listed price; in North China, the linear price of PetroChina increased by 100 yuan/ton, and some e-commerce companies increased their sales, and the low-voltage part increased by 100-200 Yuan/ton, and some e-commerce companies increase their prices, high-voltage e-commerce companies increase their prices; Northeast China Petroleum high-pressure parts increase 100 yuan/ton, low pressure increases 100-200 yuan/ton, linear general increase 100 yuan/ton; Northwest China Petroleum high pressure increases 100-150 yuan/ton, 100-150 yuan/ton for low pressure part, 100 yuan/ton for linear increase; 150-200 yuan/ton for middle oil low pressure part, 100 yuan/ton for high pressure, 50 yuan for linear general increase /Ton; In South China, the high pressure of China National Petroleum Corporation rose by 300 yuan/ton, the low pressure part rose by 100 yuan/ton, the Sinopec high pressure rose by 300-400 yuan/ton, and the linear part rose by 50-300 yuan/ton; the rest was temporarily stable. The ex-factory price of petrochemicals continued to rise, and futures continued to rise sharply, igniting the market’s rising atmosphere. Merchants actively followed up with their offers, and downstream factories continued to rework, focusing on just-needed purchases.
It is expected that domestic PE may run strongly in the short term. As of now, LLDPE in North China is quoted at RMB 8420-8750/ton, LLDPE in East China is quoted at RMB 8,400-8950/ton, and LLDPE in South China is quoted at RMB 8,500-8850/ton. According to reports, due to the extremely cold weather in the United States, many petrochemical producers’ PE equipment shut down on February 15, mainly affecting Texas, and foreign PE prices have risen more.