Even plastic shock lower short-term wait-and-see is appropriate

News: In 2019, the average price of ethylene in China was 7238 yuan, a year-on-year decline of 27.
7%, and profits also fell
sharply.
In 2019, China's ethylene production capacity reached 28.
06 million tons, with a new capacity of 2.
56 million tons, an increase of 10%, and an output of 25.
73 million tons, an increase of 8.
5%
year-on-year.
In 2019, China's apparent consumption of ethylene was 28.
22 million tons, a year-on-year increase of 7.
3%.

In the next two years, domestic ethylene production capacity will continue to expand, and it is expected that by 2021, domestic ethylene production capacity will add another 10 million tons
.

Spot market: The price of domestic polyethylene market is mixed
.
The low-pressure film part of the main regional sales company was partially raised, and the rest was basically stable
.
Linear futures fluctuated, linear market prices fell slightly, but the US-Iran incident boosted high-pressure and low-pressure films, and the prices of related products continued to rise
.
As of the noon close, the North China market adjusted 50-200 yuan / ton; East China market adjustment 50-100 yuan / ton; The South China market rose by around 50 yuan / ton
.

Warehouse receipt inventory: exchange warehouse receipts reported 1762 lots, intraday - 41 lots
.
Main position: The top 20 long positions in the main contract are 187725 lots, -1690 lots, short positions are 265772 lots, -2027 lots, net positions are -78047 lots, net space increases
.

Summary: Crude oil rushed back down, and market worries eased
.
Fundamentally, the average operating rate of polyethylene enterprises was 89.
89%, down 1.
06 percentage points
from last week's data.
The total output of polyethylene of domestic enterprises was 360,600 tons, down 04,400 tons
from last week.
The impact of PE plant maintenance was 21,300 tons, an increase of 05,500 tons
from last week.
In the next cycle, the impact of domestic polyethylene plant maintenance is 21,500 tons
.
Up 200t from this week, PE market supply is still expected to decrease
slightly next week.
The overall operating rate of agricultural film enterprises was 36.
6%, +4.
0%
week-on-week.
The operating rate of shed film enterprises is about 35.
6%, +5.
9%
week-on-week.
The operating rate of mulch film enterprises was 38.
9%, basically flat
week-on-week.
Although the operating rate of agricultural film shed film enterprises has rebounded, the overall is still less than 40%, indicating that downstream demand is average, and the Philippines will restart its 2 polyethylene plants and 1 polypropylene plant in Batangas, and the supply of PE in Asia will increase
.
The total PE storage volume of the two barrels of oil increased slightly, and these factors suppressed linearity to a certain extent
.
Since the current situation in the United States and Iran is still unclear, the future market focuses on whether this event will be further fermented, and operationally, it is recommended that investors reduce their holdings
on high prices.