Recently, the positive cost side has supported the PP market price. Starting from the end of March (March 27th), international crude oil has shown a six consecutive upward trend due to the OPEC+organization's maintenance of production cuts and supply concerns caused by the geopolitical situation in the Middle East. As of April 5th, WTI closed at $86.91 per barrel and Brent closed at $91.17 per barrel, reaching a new high in 2024. Subsequently, due to the pressure of pullback and the easing of geopolitical situation, international crude oil prices fell. On Monday (April 8th), WTI fell by 0.48 US dollars per barrel to 86.43 US dollars per barrel, while Brent fell by 0.79 US dollars per barrel to 90.38 US dollars per barrel. The strong cost provides strong support for the PP spot market.
On the first day of returning after the Qingming Festival, there was a significant accumulation of two oil inventories, with a total of 150000 tons accumulated compared to before the festival, increasing supply pressure. Afterwards, the enthusiasm of operators to replenish inventory increased, and the inventory of two oils continued to decrease. On April 9th, the inventory of two oils was 865000 tons, which was 20000 tons higher than yesterday's inventory reduction and 5000 tons higher than the same period last year's inventory (860000 tons).
Under the support of costs and the exploration of futures, the ex factory prices of petrochemical and PetroChina enterprises have been partially increased. Although some maintenance equipment has been restarted in the early stage recently, maintenance is still at a high level, and there are still favorable factors on the supply side to support the market. Many industry insiders in the market hold a cautious attitude, while downstream factories maintain a multi-dimensional supply of essential goods, resulting in a slowdown in demand compared to before the holiday. As of April 9th, the mainstream domestic wire drawing prices are between 7470-7650 yuan/ton, with the mainstream wire drawing prices in East China ranging from 7550-7600 yuan/ton, South China ranging from 7500-7650 yuan/ton, and North China ranging from 7500-7600 yuan/ton.
In terms of cost, the upward shift in raw material prices will drive up production costs; In terms of supply, there are still maintenance plans for equipment such as Zhejiang Petrochemical and Datang Duolun Coal Chemical in the later stage. The market supply pressure can still be alleviated to a certain extent, and the supply side may continue to be positive; In terms of demand, in the short term, downstream demand is relatively stable, and terminals receive goods on demand, which has a weak driving force on the market. Overall, it is expected that the market price of PP pellets will be slightly warmer and more stable.
Post time: Apr-15-2024