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At the end of March, as the epidemic spread across the world, China increased its foreign aid for medical supplies, and the demand for melt blown cloth, which had been gradually cooling down, once again experienced a blowout, driving the price of raw material polypropylene to rise rapidly.
Polypropylene
Downstream demand surges
With the epidemic sweeping the world, the gap between supply and demand for masks continues to expand, and the price of meltblown cloth and its raw materials as the core material of masks has risen again.
"Driven by the demand for downstream meltblown cloth, the current price of high-melt index polypropylene is about 80,000 yuan, compared to only 9,000 yuan half a month ago.
In fact, due to the rapid increase in the market price of melt blown cloth, some companies that do not meet the medical grade melt blown cloth production have sprung up like bamboo shoots after a rain.
"Some small and medium-sized enterprises are driven by profits and use non-standard low-melting index polypropylene to produce meltblown cloth, which is also a reason for the increase in the price of raw material polypropylene.
Many analysts believe that the high price of polypropylene is not only driven by the basic demand for masks, but also affected by market speculation and arbitrage.
Price increase or limited
"The skyrocketing price of polypropylene is short-term, and it may return to rationality in the later period," said Yang Lin, an analyst at Zhongyu Information.
From the perspective of raw materials, propylene production can adopt three routes, namely, using petroleum, liquefied gas and coal as raw materials.
From a downstream perspective, the Ministry of Commerce has issued the latest notice.
Under the rectification of the meltblown cloth market, the demand for polypropylene fiber materials will inevitably decrease.
The beneficiary companies still need to be vigilant
Affected by the increase in the price of masks, the related industrial chain has also gained a share of it, and manufacturers of special meltblown polypropylene materials have benefited.
The quarterly report disclosed by the meltblown material manufacturer Guoen shares showed that the company’s net profit attributable to shareholders of listed companies was 69,398,900 yuan, a year-on-year increase of 91.
Driven by interests, some chemical companies are entering a period of expansion.
Sinopec said that the company uses its own polypropylene raw materials to epitaxially produce melt blown cloth.
(Keyword: Polypropylene)