Industry News
The transaction center of the propylene market has retreated, and downstream purchases with lower rigid demand have been selected
In the early stage, international crude oil futures closed lower, while polypropylene futures fluctuated weakly. Powder spot prices narrowed and consolidated, with a price difference of less than 300 yuan/ton between powder and propylene. Downstream polypropylene continued to suffer losses, and factory production enthusiasm decreased. Some downstream manufacturers exported raw material propylene, and some PP equipment stopped for maintenance during the week. Downstream polypropylene parking was relatively concentrated, which suppressed market sentiment and increased bearish demand for propylene, The wait-and-see sentiment among business owners is gradually rising, and propylene manufacturers are offering discounts to sell, causing the center of gravity in the market transaction range to fall.
However, the supporting role of the supply side still exists. The early maintenance equipment for propylene has not been restarted yet, and the spot circulation is relatively tight. The overall inventory of enterprises is not high, and the market supply pressure remains controllable. Currently, the price competition between factories is not fierce, and the price decline in the propylene market is narrow. However, the scheduled maintenance of the Zibo PDH device has been delayed until the middle and late stages, and in the short term, there are not many new positive factors on the supply side, which has limited impact on the propylene market.
In terms of upstream raw materials for propylene, the recent high spot price of imported propane has fallen, and the CFR South China frozen goods price has dropped from the highest of $735/ton in early November to the closing of $622/ton on December 5th. Domestic PDH profits have rebounded to near the cost line, easing the pressure on PDH process costs and reducing the support for the propylene market from the cost side.
In the future, the transaction center of the propylene market has rebounded, and downstream purchases have been made at a lower level of rigid demand. Demand has been sluggish, and some downstream factories continue to sell propylene externally. The spot circulation has relatively rebounded compared to the previous period, and manufacturers are mainly selling at a lower price. The short-term propylene market may continue to decline. However, the price of propylene has declined, and today the price difference between powder and propylene has rebounded to 340 yuan/ton. As market prices continue to decline, downstream profit margins gradually rebound, and buying enthusiasm has rebounded. It is expected that the market may stop falling and rebound. Continuously monitor the maintenance and restart of the propylene unit.
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