After the Spring Festival holidays, propylene market experienced more than a month of soaring propylene prices last week, the market average price of 8500 yuan (ton price, the same below), has been sideways for 10 days.
'Before the Spring Festival, propylene market rose rapidly, the main driving force is the rise in oil prices, the market supply is too small and near the end of the year the downstream plant procurement .From the post-holiday situation, these several drivers are changing, rising prices may change. 'Fushun Petrochemical resin analyst Yin Song and other market participants to make the above judgment.
Oil price shocks weaker support
January, the propylene market turmoil up, the main consumer market in Shandong mainstream market prices rose up to 8600 ~ 8670. After the Spring Festival holiday, the market fell rapidly. February 24, Shandong propylene mainstream prices have dropped 8120 ~ 8180 yuan, more Festival Before the highest price down about 500 yuan, a drop of 5.8%.
In January, the international crude oil price showed a rising trend, Brent oil price once exceeded 70 US dollars / barrel, which is to support the propylene market, especially oil propylene market rising cost factors. However, in February, the international oil prices have ended the first pre-term Rising trend, the price volatility, the impact on the propylene market also changed from simple good and short alternately. "In Yin songs, the uncertainty of international oil prices weakened the propylene continued to rise support.
According to Yin Ge, due to the strengthening of the U.S. dollar and the increase in U.S. crude oil production, international crude oil prices turned down at the beginning of February. In February, U.S. crude oil production hit a record high, and the number of domestic active crude oil drilling platforms increased significantly, deepening the international market. Concern over the continued rise in crude oil production caused the oil price to fall to the lowest point in the past two months. Moreover, OPEC crude oil production increased by 100,000 barrels per month in January, further increasing the downward pressure on oil prices. During the Spring Festival, the unexpected fermentation of the Middle East situation provided “Helping Rice Straw” has caused a temporary rise in international oil prices. However, Venezuelan President Maduro said in a speech on February 24th that it is expected to recover 70% of the previously lost crude oil production in the first half of 2018. In addition, Saudi-related personnel also expressed that They will end their production cuts ahead of schedule in June this year. After the news is released, it will inevitably affect the investor’s mentality and thus curb the pace of international oil price increases.
On February 28, the light crude oil futures for April delivery on the New York Stock Exchange fell 1.37 dollars to close at 61.64 dollars per barrel, a decrease of 2.22%; Brent crude oil futures for April delivery fell 0.85 dollars to close at every US$65.78 in barrels, a decrease of 1.28%. Affected by this, the cost support of the propylene market is not strong enough.
Re-supply of equipment to gradually loose supply
Before the Spring Festival, some of the propylene plants reduced their production due to installation problems. The reduction in output was about 200 tons per day. At the same time, due to the winter rain and snow conditions, the supply of goods from the main producing areas was not able to be shipped smoothly, causing tight supply in the market. However, entering 3 In the month, with the resumption of production of the discontinued devices, the market supply will recover. Plus, there will be a lot of new propylene production capacity this year, and the market supply will be relaxed. 'Shenyang Shengju Chemical Company sales director Cheng Sheng said.
In the first 2 months of this year, 600,000 tons / year propane dehydrogenation unit of Tianjin Bohai Chemical Co., Ltd., 500,000 tons / year propane dehydrogenation unit of Hebei Haiwei, 600,000 tons / year propane dehydrogenation unit of Ningbo Bohai, 450,000 units of Shaoxing three rounds Ton/year propane dehydrogenation units have been overhauled or shut down. Recently, these units were gradually overhauled and resumed production. The market supply gradually recovered.
Look at the new capacity of the propylene industry this year .In 2018, there is a new intention of propylene production capacity of 3.07 million tons.Among them, the larger the second phase of China Sea Shell 960000 tons / annual capacity, Fujian Petrochemical 660000 tons / Annual production capacity, the joint coal 350,000 tons / annual production capacity, Yan'an Yan'an oil to extend 350,000 tons / year capacity, long Thai energy 300,000 tons / year production capacity, etc. It can be seen that this year, the expansion of propylene capacity momentum continues unabated, and The new production capacity has spread all over the northeast, northwest, east China, and south China. A large number of new production capacity will be put into operation, which will surely impact the market.
Downstream weak demand suffered heavy losses
'The impact of downstream polypropylene, especially powder, on the propylene market is self-evident, and in the near future there will be major changes in the operating load on the polypropylene industry and on the demand for propylene,' said Yin Ge.
According to Yin Song analysis, propylene prices rose sharply before the Spring Festival, polypropylene market demand is the main driving force.But since February, the polypropylene industry operating rate dropped significantly.On the one hand, propylene soar in January so that polypropylene manufacturers bear Huge cost pressures, manufacturers shipping ineffective, and even individual factories appear more substantial losses, has suppressed the enthusiasm of manufacturing enterprises.On the other hand, during the Spring Festival polypropylene plant holiday break, postganglionic as the profit is not high, the enthusiasm of manufacturers is still Not high, the recovery status of the start-up load in the industry is not optimistic, and the demand for propylene has not increased substantially.
Moreover, the overall demand for polypropylene downstream is hardly optimistic recently.With the arrival of the off-season industrial products in the second quarter, the market demand for plastic braid into the off-season; injection products, with the peak holiday consumption ended, Market demand will also decline in the second quarter, downstream consumption will enter a trough, the impact of the market demand for polypropylene weakened, will drag down the propylene market into the downlink channel.