Brazil, Vietnam, Indonesia and other polyolefin plants temporarily shut down. Polyolefin prices have fluctuated!

There are fluctuations and uncertainties in the new crown pneumonia epidemic in Japan, South Korea, Iran, Italy, India, Brazil, the United States and other countries outside China
.

From March to May each year, the Northeast Asian naphtha cracker enters the regular shutdown and maintenance season

Three polypropylene (PP) producers in Southeast Asia unexpectedly closed their factories in late March, further tightening supplies in the region
.

However, the closure of the factory seems to have little impact on the market, as buyers continue to seek PP supplies from China to make up for the shortage

Due to technical problems, South Korean PP producer Hyosung closed its 300,000-ton/year PP plant in Ba Ria-Vung Tau Province, Vietnam on March 28
.

The plant will resume operations within this week

Due to technical problems, Vietnamese operator Nghi Son Refining and Petrochemical closed its 370,000 tons/year PP plant in Thanh Hoa Province on March 30
.

Industry sources said the plant is expected to remain closed for a week

Indonesian producer Polytama Propindo has suspended PP distribution to its domestic contract customers.
This may be due to a fire at the state-owned Pertamina's 125,000 barrels per day Balongan refinery on March 29, which interrupted its raw material propylene supply expectations
.

As part of the safety measures, on the same day that Pertamina closed its refinery to prevent the spread of the fire, Indonesian producer Polytama Propindo temporarily closed its 300,000-ton/year PP plant in Balongan, western Java

According to a customer letter, Polytama is coordinating with Pertamina to supply propylene raw materials so that it can resume operations, but did not provide a restart date for its PP plant
.

Market participants said that Pertamina is gradually restarting its Balongan refinery and it is expected that it will resume normal operations soon
.

Pertamina said last week that after the fire, the refinery may be closed for about 4-5 days

Since the beginning of March, the supply of PP in the region has been tight.
Due to the shortage of propylene raw materials, two producers have operated their factories at lower interest rates, and another producer closed the factory last month for planned maintenance
.

Southeast Asian buyers have been looking for PP supply products from China, which are widely supplied at competitive prices to make up for the shortage of manufacturers in Southeast Asia and the Middle East, mainly the shortage of drawing grades

Sao Paulo-Brazilian petrochemical producer Braskem said that the company had partially stopped operations at its Sao Paulo plant on April 5 for a planned 51-day maintenance period
.

Braskem said in a statement that the shutdown affected chemicals and polyethylene in the complex

Braskem warned that there may be agitation during the first and last days of maintenance
.
The company said it has plans to increase inventory levels so that the supply chain will not be affected by maintenance
.
According to a trader, due to the decline in resin consumption, supply and demand in Brazil appear to be balanced in the coming months
.
The trader said: "The packaging market is too weak and will get worse in the next two months
.
" "By the way, this is a seasonal behavior
.
"

However, another trader said that because there are fewer products from the United States, there may be a shortage of polyethylene in the local market
.
More than half of the imported PE entering Brazil comes from the United States .

2021/4/8: Update on polyolefins in the United States: Spot plastics trade slowed down, and prices fluctuated, among which HDPE continued to rise sharply
.

Spot plastic trading activity slowed down last week, because March and the first quarter ended on Wednesday, and many participants took early leave due to long vacations
.

Commodity resin prices rose and fell mixed, HDPE continued to rise, while most other polyethylene grades remained stable
.
Polypropylene gave up its early gains and then fell a few cents on Friday
.

However, the trading volume of our platform has exceeded the historical average, but it has not yet reached the highest level in the first quarter of 2021
.
Nevertheless, we broke the records of many companies this month and this quarter.
During this unprecedented resin shortage, we are very grateful for the support of loyal suppliers.
The purchase orders of processors and resellers are very busy.
Analysts And the media has great overall interest in the plastic exchange spot market and the entire resin industry
.

The plastics industry has been recovering from a series of severe production disruptions that began with hurricanes in late August, and then continued one after another, eventually erupting in a winter storm in mid-February that hit the Houston/Louisiana area
.

This storm shut down most of the petrochemical and plastic production facilities in the United States, resulting in a reduction in PE supply and a record low in PP resin inventories
.
After almost no new quotations for resin were seen to be zero in the second half of February, prices continued to hit new highs until the first half of March
.
The quality of the quotation continues to improve with the passage of the month, but with the force majeure declaration in place, the manufacturer’s main materials are only used to fulfill the contract orders
.

At present, most resin equipment can basically be restored to operation, but some equipment still has monomer supply problems, and it is obvious that they are consistently producing high-quality resin
.
We expect that the restart of the petrochemical plant will face challenges, but six weeks later, we can still see a large number of secondary cards.
Transition and discoloration resins can still be used in the secondary market, which is still somewhat surprising
.

Despite some disruptions in demand, buyers generally remained resilient and increased prices in large strides.
This is good because the industry still has a lot of work to do before supply and demand reach equilibrium
.

Polyethylene producers achieved an increase of US$0.
19 per pound in the first quarter, and the price in April was as high as US$0.
09 per pound
.
Although there have been some downgrades, and from Asia to the Middle East (now the Suez Canal has been cleared), Prime Blow Molding resin basically does not exist in the spot market
.

High-flow HDPE injection grades remain extremely tight, while low-melt grades (such as barrels and crates) have begun to appear
.

LLDPE film grade products continue to be tightly supplied and gradually move closer to LDPE film prices
.

Low-volume commercial-grade products (such as LDPE and LLDPE for injection) are still very scarce because they are not the main resin produced in early recycling
.
The cost of ethylene monomer has continued to rise and has been rising again in the past week
.

Even before the severe winter storms, the supply of polypropylene was incredibly short, so the additional interruption was unsustainable, and the price responded accordingly, rapidly soaring to the level of US$1.
50/lb
.
Although certain grades of products (such as CoPP durable resin and colorless transparent resin) overcome this barrier, even when the contract price drops by about $1.
125/lb (including $0.
185/lb), most other PP The material remained stagnant throughout March and remained at this high level
.

The decline in monomer costs was offset by an increase in gross profit of $0.
06/lb
.
Indeed, a large amount of PP imports can help meet the main needs of certain processors, and cheaper and inferior materials have become the favor of more flexible processors who can sacrifice quality at the expense of price
.
The growth and inelasticity of demand keep spot prices up
.

The spot price of PGP monomer continued to decline until April, falling to $.
535/lb, indicating a sharp drop in another monomer contract.
If it continues, it will affect the PP contract, which will be another increase in PP profit.
The rate of profit is offset
.

Although the supply and demand of PP are still imbalanced, we expect that as the bubble flows from the top of the market, PP prices will begin to erode
.
It is unsustainable for the price of resin to be nearly $1 per pound higher than the price of monomer
.
However, as all margin increases are injected into the PP contract, we expect the price cut will be more stable, rather than a severe price plunge
.