South Korea cold Krstic, KPIC, SKGC total of 580,000 tons of propylene production lines temporarily closed, supply decreases, propylene latest spot price rose more than 5%, the price of 1,150 US dollars per ton stand, climbed to a new high in November 2014; Butadiene also due to several domestic BDH (butane dehydrogenation) downtime or cut, quoted a strong bounce 6%, breaking 1 400 US dollars, Formosa Plastics (6505) benefited from tonic.
As a result, the performance of downstream PPs in propylene and home appliances and automobile upgrading will be further boosted due to the increase of costs and the double promotion of demand. The performance of Formosa Plastics (1301), Taiwan (1326) and Ronghua (1704) is also expected to move in tandem.
According to IHS's forecast, in Asia, PP imports will reach about 7.8 million tons in 2018, of which the most-demanded domestic production capacity will be large, which is estimated to exceed 4.5 million tons in 2017. With the upgrading of home appliances and automotives, the demand for upgrading will continue to grow in China and Southeast Asia Market sentiment pulled, PP, AN and MMA steady strong market.
Last year, the domestic PP apparent consumption growth rate remained at 7%; in the long run, PP downstream consumption will be better than PE, mainly due to durable goods areas (cars, appliances, etc.) and alternative materials boost.
Formosa Plastics believes that benefiting from the growth of automotive materials and home appliance demand and restricting the import of waste plastics, coupled with the zero tariff of PP copolymerization grade sold to other countries, it is expected that PP will maintain a steady profit this year.