I. price trend

According to the data monitored by the business agency, the domestic PP market in November was mainly subject to fluctuation and adjustment, with spot prices rising and falling. As of November 30, the main offer price of T30S by domestic producers and traders was about 8383.33 yuan / ton, down 1.95% from the beginning of the month.

II. Cause analysis

Upstream: upstream propylene was mainly subject to fluctuation and reduction in November, while domestic propylene spot price went down in a stepped manner. This decline has been seen since the end of October. The upstream international crude oil is affected by the OPEC production reduction policy or the news that it will be extended. The market is generally ideal, which has a certain effect on propylene. Downstream it is reported that some propylene oxide and polypropylene powder plants reduce the load and demand, which has a negative impact on propylene. Epichlorohydrin prices fell sharply in a row, down 28.19% since November 1. At present, its cost support is weak, the downstream epoxy resin is in weak operation, the market wait-and-see atmosphere is not reduced, there is no obvious positive factor, and the upstream power is insufficient, which has a significant suppression effect on the propylene market. Generally speaking, propylene market has been declining for two consecutive rounds. The domestic inventory is average, but the load of downstream units is reduced, so it is expected that the market price of propylene will continue to be lowered in recent days.

Product: in November, the spot price of PP market rose and fell with each other, and the overall adjustment was weak and volatile. The upstream propylene market is weak, and the cost side support for PP is limited. In terms of supply, at present, the operating rate of PP plant has rebounded. From the end of the year to the beginning of next year, PP production capacity also put a lot of pressure on the supply side, and the production capacity is still in the stage of rapid expansion. Industry competition is becoming increasingly fierce and profits are being squeezed. In terms of demand, the main downstream plastic products, such as plaiting, BOPP film, non-woven fabric, injection molding, etc., are weak. The downstream products are weak and there is no centralized replenishment phenomenon in the downstream factories, so the low price and rigid demand procurement is adopted. On the macro level, the growth rate of China’s plastic product output slows down in 2019, the decrease of China US economic and trade friction plastic product export and the increasing pressure of transformation and upgrading of plastic enterprises are all important factors for the compression of plastic enterprises’ profits. At the end of the month, the petrochemical inventory was digested smoothly, the business tasks were completed successively, the spot price was firm, and the market had no clear direction. At present, PP in China is in shock adjustment, with weak rise and fall, and lacks the opportunity to reverse from the downward channel.

III. future forecast

PP analysts of business club think: domestic PP prices fell in November. The upstream propylene market is weak and the cost end support is limited. For the replenishment of downstream factories, there is no centralized purchase, and the strategy of just need to take delivery is adopted. Due to the expected expansion of domestic production capacity, PP supply shows a long-term expansion trend, and industry competition is strengthened. It is expected that the PP market will continue to adjust slightly in the near future. It is suggested to pay attention to the supply of PP in the near future.