Plastic futures have shown a pullback since late January, amidst the slump and weaker consumption of crude oil. Technically, plastic futures are still in oscillation range now, and there is no sign of stabilization in the short term.
Weak demand
The consumption season of mulching film is March and April, therefore, the downstream mulch film factories focus on the pre-season mulching film consumption season from the end of each year to the Spring Festival, and the plastic manufacturing enterprises will maintain the high production load in this period to meet the market demand. However, This year is a lunar year of the leap year, compared with previous years, the Spring Festival to be late, pre-holiday stocking cycle is longer .In this case, the market is not willing to stocking, stocking has not focused on large-scale, the overall procurement is still just required , Demand side of the plastic support but less than in previous years.
Due to the current plastic construction started at a high load while demand is not high, the overall pattern of supply and demand is still showing a pattern of weakness and the situation of plastic decline is hard to be changed. From the perspective of the current spread, the recent rise of premium discounted to premium, After the Spring Festival holiday, polyolefins into the off-season, the price fall is a high probability event, the current spot plastic futures discount is a normal phenomenon, to further verify the overall weak plastic pattern.
Low inventory
Under normal circumstances, plastic and petrochemical stocks are low, companies will be quite reluctant to sell, the greater the probability of plastic increases.If the plastic social stock is also low, the downstream Strong corporate repossession, in the case of resonance between the two, plastic prices usually appear more substantial rise.
The fourth quarter of last year, the domestic plastic stocks at a low level, which is plastic prices rose sharply in the fourth quarter of last year, an important reason for now, the domestic plastic stocks are still at a low level .As of February 7 this year, PE stocks in East China 14,680 tons, South China PE stocks of 19400 tons of PE, petrifaction inventory of 48,600 tons, are lower than before the Spring Festival last year.Low inventory short-term for the price of polyolefins play a strong role in promoting, but because of the plastic enterprises during the Spring Festival usually Will continue to produce, and downstream businesses will be discontinued on a large scale, so the post-season accumulator will slow the impact of low inventory on the plastic.In this case, the low inventory of polyolefins will still have some supportive role, but Support will be weakened.
In summary, due to poor demand for plastic this year, the peak season is not conducive to plastic prices also formed a certain suppression.However, given the current overall inventory of plastic is low, the market is willing to price quite strong, so plastic down space is also compressed .
Based on the above judgment, taking into account the weakening of supply and demand, I believe that the recent plastic futures or will continue the weak pattern, but down 9,200 yuan / ton lower probability of lower edge of the oscillation range is low, the proposed operation short short is appropriate.