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The market is unlikely to perform well next year
The market is unlikely to perform well next yearThe arrival of the peak of production expansion combined with the slowdown of economic growth and the uncertainty of Sino-US trade, the supply and demand pattern of polyolefins will change in the future
.
market
marketContinued to fall for a whole year
Continued to fall for a whole year"In the first three quarters, the domestic polyolefin market generally fluctuated and declined.
As of late August, the prices of linear low-density polyethylene (LLDPE) and low-density polyethylene (LDPE) fell to the lowest point in the past 10 years, and the prices of other varieties also fell to the lowest level in the past five years.
, the ex-factory prices of some polyethylene (PE) varieties have fallen below the cost line
.
Why is the domestic polyolefin market so sluggish? Xu Yan believes that the imbalance between supply and demand is the main factor
.
Looking back at the trend of the domestic polyolefin market this year, the first quarter was generally weak, and the inventory of downstream factories was at a high level in recent years; after mid-April, there was a phenomenon of stockpiling, and traders lowered their prices and promoted them; and the continuous escalation of Sino-US trade frictions further The market panic was aggravated, and the price purchasing power index was at a low point in recent years; in late June, the market stopped falling and stabilized, and the prices of some varieties rebounded; from July to August, there was a lack of supply and demand.
Although there were many maintenance devices, the downstream demand was weak.
Both internal and external disks competed for price cuts, and some varieties hit another low in nearly 10 years; in September, with the recovery of demand and the decline in inventory, the market stopped falling and stabilized; in October, prices fell again
.
supply
supplyThe peak of global production expansion is coming
The peak of global production expansion is coming "Domestic polyolefins are at the peak of production expansion.
2020 will be the year with the most concentrated production of new units.
The downward pressure on the market will increase, and the price of polyolefin products may face cost considerations, and local production cuts may become a high probability event
.
Xu Yan further analyzed that 2019 will still be a year of relatively concentrated expansion of global PE and PP capacity, and the total production capacity will reach 102.
08 million tons and 56.
07 million tons respectively (both excluding mainland China)
.
From a global perspective, Asia-Pacific is the most important polyolefin import and demand region, and the increase in China's PE mainly comes from the pressure of imports
.
"If the increase in PE is a combination of internal and external progress, then the increase in PP will mainly come from China.
In 2020, the increase in domestic polyolefin supply will hit a historical peak, and the supply pressure will be unprecedented
.
It is understood that in 2020, Zhejiang Petrochemical, Qinghai Damei Magnesium, Liaoning Bora, Hengli Petrochemical Phase II, Yanchang China Coal Yuneng Chemical Phase II, Zhejiang Satellite Petrochemical, Wanhua Chemical, Jinzhou Petrochemical and other more than 10 sets of polyolefin plants Test runs will be built one after another, and a batch of propane dehydrogenation to propylene projects will also be put into operation.
The pressure on the PP market will increase in the first quarter of next year.
It is estimated that by 2022, the domestic PP surplus will be nearly 4 million tons
.
Based on an annual import growth of 5%, PE will also have a surplus of about 2 million tons by 2022, and the East China market may become a global price depression
.
need
needDownstream operating rate is low
Downstream operating rate is low In recent years, with the upgrading of product structure and the improvement of people's living standards, the demand for plastic pipes and hollow containers has grown rapidly
.
However, Xu Yan believes that although the types of downstream plastic products are scattered and rigid demand is strong, the production capacity of most varieties is absolutely surplus, and the demand structure has not changed significantly
.
Compared with the diversification of upstream industries, the concentration of polyolefin downstream industries has continued to increase, and the transfer of industrial chains has accelerated, resulting in intensified competition in domestic trade links, and the situation is not optimistic
.
According to reports, the overall operating rate of plastic products factories this year is weaker than last year.
For example, the operating rate of processing enterprises such as PE pipes, PP fibers, PP plastic weaving, and cables in October was about 65%, which was lower than the same period last year
.
In particular, a large number of small and medium-sized enterprises is the main factor that drags down the average operating rate of downstream enterprises
.
Affected by downstream destocking, the operating rate of the plastic products industry in the second quarter was generally lower than in previous years
.
"With the continuous escalation of Sino-US trade frictions, the speed of relocation of plastic enterprises has accelerated significantly, and the integration of small and medium-sized enterprises has intensified, resulting in the gradual concentration of orders to large and medium-sized factories, and the gradual reduction of export orders
.
This in turn will inevitably lead to intensified competition in the trade link and the market The price is easy to fall and difficult to rise, and it is more difficult for small and medium-sized traders to make profits
.
" Xu Yan said that small plastic traders in places such as Yuyao, Zhejiang, Linyi, Shandong and other places have been under great pressure in the past two years, and their living space is getting smaller and smaller
.
It is estimated that by 2021 or 2022, with the acceleration of downstream integration, small and medium-sized traders will exit the market by then
.
