Energy side disturbances exacerbate the weak operation of polyolefin futures
2023/10/12
PE maintenance has significantly reduced, device load has increased in a narrow range, and output has increased in a narrow range. PP has added new production capacity, but the monthly maintenance losses exceeded expectations, resulting in a decrease in production and capacity utilization. In September, the estimated PE production was 2.2926 million tons, an increase of 0.82% month on month and 14.95% year-on-year. From January to September 2023, the cumulative domestic PE production was 20060400 tons, an increase of 12.16% year-on-year. The estimated PP production in September is 2.7525 million tons, a decrease of 3.62% month on month and a year-on-year increase of 12.56%. The cumulative production of PP from January to September 2023 was 23.7175 million tons, an increase of 6.87% compared to the same period last year. The estimated operating load of domestic PP plants is 80.29%, a decrease of 2.28 percentage points month on month. Among them, the operating load rate of oil based PP is 76.11%, coal based PP is 90.10%, and PDH is 81.89%. The estimated maintenance loss of domestic PP devices is about 453000 tons, an increase of 66000 tons compared to the previous month.
In terms of new plans, the 400000 ton/year PP plant of Ningbo Jinfa Phase I will start production in late September, and produce granular materials during the National Day holiday; The initial plan for the second line 400000 tons/year PP plant is to be put into operation by the end of October. The production of a PP plant with a total annual production capacity of 300000 tons for Huizhou Lituo New Materials has been postponed to the fourth quarter.
In terms of imports, the peak season of Jinjiu is expected to improve, with end users maintaining a strong demand and increasing willingness to purchase goods. The pressure on the RMB exchange rate is gradually easing, import sources are trading at low prices and volume is gradually increasing. The domestic import arbitrage window is open, and the willingness of domestic traders to take orders is increasing. According to customs data, the total import of PE in August 2023 was 1.216 million tons, an increase of 1806800 tons, an increase of 17.46%, and a year-on-year increase of 1.36%. From January to August, the cumulative import volume was 8.5756 million tons, a year-on-year decrease of 2.02%. PP imported 2160200 tons in August, a month on month increase of 61700 tons, an increase of 2.95%, and a year-on-year decrease of 4.59%; From January to August, the cumulative import volume was 1.8047 million tons, an increase of 2.23% year-on-year.
In September, the downstream construction of PE increased, and the main downstream areas of PP gradually entered the seasonal consumption peak season. The construction level of downstream areas was weaker than that of the same period. The current downstream mainstream operating load ranges from 41% to 57%. PO film is in the peak season of production, and the demand for dual prevention film and garlic film has followed up. The construction of greenhouse and film has increased, and the overall construction of agricultural film continues to improve. In November and December, with the weather turning cold and farmers covering the greenhouse, agricultural film orders may gradually turn weak. Downstream industries such as plastic weaving and injection molding saw a slight increase in production compared to the previous month, while the BOPP film industry also maintained a relatively high level of production. However, the gross profit situation remained weak and operational pressure remained.
Overall, the fundamentals have shifted from a dual increase in supply and demand to a weak increase in supply and demand, exacerbating disturbances in the energy sector. During the holiday, there was some bearish sentiment in the oil market, but at the same time, oil prices also significantly declined to release risks. In the fourth quarter alone, OPEC+will continue its previous production reduction measures, and global crude oil inventories are expected to continue to decline. It is expected that there will be limited room for further downward movement after the sharp drop in oil prices, with oil prices mainly fluctuating, but the central market will have a downward trend. There are fewer domestic maintenance devices in the future, and the new production capacity of PP is concentrated and released, resulting in an increase in supply pressure. The golden nine silver ten peak seasons have come to an end. As downstream consumption enters the off-season, demand gradually weakens, and terminal demand follows slowly. The construction of agricultural film and PE pipes has slightly increased, while terminal household appliances and real estate are constrained by cautious expectations, which limited the boost to consumption. After the release of pressure on new production capacity, the surplus situation further highlights, and the futures prices are running weakly.
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