Although the downstream will usher in the 'Golden September and Silver 10' peak season, the LLDPE price continues to be at a high level. The downstream enterprises have certain resistance, and the purchasing intention is not strong. It is expected that the LLDPE may continue to fall.
Recently, the international crude oil market has slowed down and the LLDPE cost support has weakened. With the resumption of the window of Shanghai Petrochemical, Daqing Petrochemical and other devices approaching, the supply rise is expected to heat up, while the downstream has many resistance to high-priced raw materials, and the enthusiasm for stocking is not high. Therefore, it is expected that the LLDPE futures price may show a downward trend.
Plastic cost support weakening
Although US crude oil is still in the peak season of consumption, the US refinery will usher in a seasonal maintenance period in September, when crude oil demand will enter a downward cycle. In this year's peak consumption season, the US crude oil inventory is not obvious. There are 410 million barrels. In the context of poor inventory destocking and declining demand, US crude oil production has maintained a growth momentum and continues to hit new highs. The US Energy Agency (EIA) released a report showing that due to US shale oil production Profitable and flexible, US crude oil production will increase further. As of the week of August 27, US crude oil production increased by 100,000 barrels per day to 11 million barrels per day. At the same time, the global emerging market economy was plagued by trade disputes. There is a downside risk to the outlook for crude oil demand. The superposition of negatives will lead to pressure on oil prices, thus weakening the cost support of plastics.
Supply has increased expectations
At present, there are still many domestic petrochemical maintenance devices, and the LLDPE start-up ratio is maintained at a low level of 33.78%. However, as most petrochemical maintenance devices resume driving in September, there will be significant improvements in the supply side. It is understood that most of the equipment at Daqing Petrochemical will be The maintenance will be completed until the end of September, and the two sets of Shenhua Ningmei and Shenhua Xinjiang will resume production in mid-September. It is foreseeable that with the overhaul of the stock equipment, the production capacity will be released.
In addition, although the current price gap between HDPE and LLDPE is still at a high level, it has peaked at the end of July, and the power of enterprises to convert HDPE has been weakened, and the supply of LLDPE will gradually increase.
Downstream stocking is not active
Although the downstream will usher in the traditional consumption season of 'Golden September and Silver 10', the price of LLDPE continues to be at a high level. The downstream enterprises have certain resistance and the purchasing intention is not strong. The price of agricultural film is rising slowly, and the cost of raw materials cannot be effectively transmitted, further curbing demand. According to statistics, the overall agricultural film operating rate remained at around 42%, down 2 percentage points from the same period of last year. At present, the price of film in North China is 9800-10000 yuan/ton, only 250 yuan higher than the lowest point in the year. Tons. At present, the environmental protection inspectors in Shandong are still grim, and the production of agricultural film is limited. In the peak season, the downstream stocks are mostly purchased and purchased.
The picture shows the trend of LLDPE domestic and international spreads
In summary, the international crude oil rising momentum weakened, LLDPE cost support weakened, coupled with increased supply expectations and weak demand prospects, LLDPE will fall into a state of easy decline and difficult to rise, and the market outlook for LLDPE is expected to continue to fall.