News summary
Increase in production capacity and maintenance affect PP supplybwinslotsWeak demand and rising sea freight rates have affected PP exports. high inventorybwinslots, propane prices are strengthening, and we are concerned about the commissioning of Jinneng and the fluctuations in raw material prices. Short-term PP prices are strong, and long-term supply and demand conflicts may cause prices to fall.
Newsletter text
[With the addition of new production capacity, some of the maintenance losses in the PP industry have been compensated] Although the centralized maintenance of some production units has resulted in the PP load remaining at a low level, with the addition of Anhui Tianda and Quanzhou Guoheng, the increase in new production capacity is expected to offset the losses caused by maintenance, market participants should pay close attention to the progress of Jinneng Technology's commissioning.
[The PP market faces multiple challenges] Weak downstream demand and insufficient follow-up of new orders have resulted in negligible production profits. At the same time, the continued rise in shipping costs and the tight situation of containers have caused PP's exports to show a weakening trend.
[Inventory pressure is highlighted, petrochemical companies have accumulated inventories slightly] Although PP supply remains at a low level, the unfavorable situation of spot transactions and the slowdown in inventory removal have led to an increase in the inventories of petrochemical companies compared with the same period last year.
[Propane prices rise, and the profit margin of PDH PP is compressed] The high toll of the Panama Canal and tight supply in the Middle East market have led to an upward trend in propane prices, which further narrowed the profit margin of PP production through the PDH process. Therefore, the market has paid more attention to the start-up of the PDH PP plant.
[PP prices fluctuate in the short term, and demand growth expectations and price decline risks coexist.] In the short term, PP prices are affected by market sentiment and show a strong trend. However, as market sentiment cools down, PP prices are expected to return to their basic orientation. With the gradual restoration of maintenance equipment at the end of May and the putting into operation of new production capacity, the supply of PP is expected to increase, which may aggravate the contradiction between supply and demand and cause downward pressure on prices. Fluctuations in raw material prices and the production progress of new production capacity will become the focus of the market.