By vantal Recently, international oil prices have continued to fall sharply, and plastic raw materials such as PE and PP have also fallen into the downward channel, and prices have generally fallen. The Guangzhou Plastics Index of Guangdong Plastics Exchange dropped from a high of 1131 to 970 points, and the China Plastics Warehouse Receipt Index of Zhejiang Plastics City also dropped from 1411 to 1251, with the cumulative decline of plastic raw materials in the two places reaching 14% and 11% respectively. It should be said that from upstream crude oil to downstream plastic products, it has become the main reason to suppress plastic prices, and there is still room for downward adjustment of plastic prices in the future.more importantly, plastic clip strip Made a fighter in the product, not afraid of any competitor’s attack. https://www.ykcommodity.com/
Trend chart of LME ethylene futures continuous contracts since the beginning of May
Crude oil into plastic price vane
In recent years, the correlation between international oil prices and major plastic raw materials such as polyethylene (PE) has been tested by the market many times. International crude oil futures are currently consolidating at $60, but from a fundamental point of view, negative factors have a slight advantage. First of all, the supply bottleneck has improved and demand has shown signs of slowing down. Although the global demand for crude oil is still growing rigidly, the recent growth rate shows signs of slowing down. Recently, many favorable factors that have caused oil prices to rise, such as crude oil production, world surplus capacity and refinery capacity, have also shown a easing trend. Secondly, geopolitical contradictions are gradually weakening. Third, from the perspective of speculation, the long position of American futures funds is decreasing, the short position is increasing, and the net long position of funds is decreasing. Since the bulls have made huge profits in the high oil price range in the early stage, profit-taking is also one of the reasons for the fall of oil prices. After several weeks of lightening positions, the downward momentum of oil prices has weakened, and it is very likely that it will be replaced by a volatile trend. Under the action of the weather vane of crude oil, the plastic price is still likely to continue to fall.
Downstream demand continues to be weak.
Before September, with the continuous surge of crude oil price and ethylene monomer, domestic petrochemical enterprises continuously raised the ex-factory price due to cost pressure, which led to the rising market price. In July and August, the cumulative increase of general film materials was as high as 850-1000 yuan; However, the resistance from demand is not small, especially the downstream factories’ ability to receive goods in the face of the rising market is declining; The high price of plastics is actually in a situation where there is no market. After September, with the collapse of oil prices, the quotations of Asian ethylene monomers and propylene monomers also fell back; PetroChina and Sinopec also lowered the ex-factory price and regional delivery price of PP and LLDPE several times. However, the decline in market prices has not effectively stimulated downstream demand, and PP and LLDPE markets have weakened. Although it takes a process to transfer raw materials from the upstream to the downstream production price, it is certain that the current attitude of the downstream as a whole to wait and see and take with it will not give the market much room for rebound.
Industrial characteristics determine that plastics still have room for downward adjustment.
At present, the international oil price has returned to the low point since the beginning of the year, but the plastic price has not been adjusted to the price at the beginning of the year. There is still a lag time when the price increase of crude oil is transmitted to the refined petrochemical products, and the fluctuation of crude oil price is far greater than that of petrochemical products, and the futures price is the most prominent. When the futures price “becomes” the spot price, the real price adjustment will begin. Take PE as an example, its production process is generally crude oil-naphtha (or other cracking raw oil)-ethylene-polyethylene. As the basic raw material of PE, the price of crude oil lags behind the PE cost by more than one month. Therefore, the price impact of downstream petrochemical products has not been fully reflected.