The inflection point of the profit of the plastic products industry has appeared, and the polyolefin has fluctuated at a high level
2023/8/16
From a general perspective, the prices of the processing industry and the prices of the raw material industry continued to decline year-on-year, and the gap between the two has narrowed. From the perspective of subdivided industries, the prices of plastic products and synthetic materials also fell, and the difference between the two also narrowed compared with the previous month. Just like the analysis in the previous issues, downstream profits have peaked in stages, and the inflection point has dropped for the first time, which indicates that the prices of raw materials and finished products have both started to rise, and the price of finished products will be slower than that of raw materials during the recovery process. The price of polyolefin raw materials is just like this. The bottom of the first half of the year is likely to be the bottom of the year, and the rise of shocks is the melody of the second half of the year.
The prices of raw materials and processing industries continue to fall, and the profits of the processing industries have reached an inflection point
In July, the prices of the processing industry fell by 3.8% year-on-year, and the prices of the raw material industry fell by 7.6% year-on-year. Since the price of raw materials fell less than that of the processing industry, the difference between the two represented that the profits of the processing industry began to shrink, showing signs of an inflection point. As shown in the figure, the profit of the processing industry is basically inversely proportional to the price of raw materials and the price of the processing industry.
As the profits of the processing industry fall from a high level - the top falls, corresponding to the simultaneous rise in the prices of raw materials and processing industries - the bottom rises.
The upstream and downstream prices of polyolefins continue to drop synchronously, and the profits of plastic products have reached an inflection point
In July, the prices of chemical raw materials and chemical products manufacturing fell by 14.2% year-on-year, the prices of synthetic materials fell by 16.5% year-on-year, and the prices of plastic products fell by 5.1% year-on-year. As the price of synthetic materials fell less than that of plastic products, the profits of plastic products shrank compared with the previous month, and after three consecutive months of expansion, the first shrank, showing an inflection point. From the perspective of profit improvement, the profit turning point of plastic products means that the continuous improvement of raw material prices will be faster than that of plastic products.
Judging from the price trend of plastic products and synthetic materials, after the profits of plastic products continue to improve to a certain high point, the prices of synthetic materials will start to rise from a low level, and the speed will be faster than that of plastic products, so the profits of plastic products will begin to decline. From this, it can be expected that the price of synthetic materials will bottom out and rise, and its duration depends on the improvement of the global economy and the introduction of domestic stimulus policies, and more importantly, the profit transfer of the synthetic plastics industry chain.
The inflection point of the profit cycle of plastic products needs to be confirmed, where will the price of polyolefins go?
The transfer of product profits on the industrial chain is accompanied by price changes between raw materials and products, forming a profit cycle. Judging from the price changes of products and raw materials, the profit of plastic products increases as the price of raw materials falls. When the profit of plastic products is high enough, the start of production will stimulate the increase in effective demand, which will drive the price of raw materials to rise. This is a game between the two sides. process. It is expected that follow-up confirmation will be required as the profit of plastic products shrinks. The weakening of the margin after the peak of the profit cycle is actually a confirmation that the price of polyolefin raw materials has gradually bottomed out and then rises. As previously expected, the price of polyolefin raw materials continued to rise after bottoming out in June, and the price in June is more likely to become a depression within the year, thus unveiling the journey of shocking rise from the bottom. What needs to be vigilant at present is that after continuous rises, the daily line has continued to make new highs since the bottom, and be wary of technical callbacks. In general, polyolefins fluctuate at a high level in the short term, and the follow-up strategy will still be to do more on dips.
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