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Propylene: Accelerated Decline In The Market, With The Offer Approaching Its Lowest Point In Recent Years
- Nov 30, 2018 -

Last week, the number of ships arriving at various ports increased centrally, and the volume of goods arriving at ports from outside stocks reached about twice the normal level. Shengli Petrochemical 50,000 tons/year propylene plant and Haike Old Factory 35,000 tons/year propylene plant were reproduced, and the pressure of propylene supply surface continued to rise. In addition, the international crude oil and polypropylene futures and spot prices continued to fall sharply, which brought about a big air shock to the mindset of traders. The strong wait-and-see sentiment of downstream factories and the approaching arrival of some of the external supply have led to a sharp decline in overall buying power. Propylene refinery shipments were blocked, short expectations increased, and a large number of Profit-giving shipments were made. The positive selling mentality was more obvious, and the decline was larger than the expectations of the industry. As of November 26, Shandong propylene market prices fell 825 yuan/ton, or 9.91%, compared with last Wednesday.

In recent years, the upstream and downstream devices of propylene fluctuate frequently. Fuyu Chemical Company's 50,000 tons/year propylene plant, Shenchi Chemical Company's 80,000 tons/year propylene plant and Wantong Chemical Company's 30,000 tons/year propylene plant will resume production in early December, and propylene market supply will continue to increase. Load of some downstream powder factories decreased slightly, and propylene supply was generally dominated by length. In terms of butyl octanol, the downstream of Bohua in Tianjin has a negative effect on propylene production, which is about 150 tons. Shandong Blue Sail and Jiangsu Huachang Butanol Plant are scheduled to resume production in early December. A propylene oxide plant in Sanyue, Shandong Province is scheduled to be overhauled for five days this week. In addition, 80,000 tons/year acrylic acid plant in Kaitai Industrial New Area started operation last weekend.

At present, it is estimated that from the end of November to the beginning of December, the arrival volume of external supply is still relatively large. Under the negative impact of macro news, downstream buying enthusiasm is still not high, propylene supply is mainly about long and just in need of bulk orders. The market has no clear good news guidance for the time being. In the short run, the fatigue is difficult to change. The upstream and downstream traders are cautious in their average mentality. It is suggested that we pay close attention to the impact of international crude oil and PP futures price trend on TRADERS'mentality in the near future. At present, the downstream propylene inventory consumption stage, refinery offer is close to the year's low. If the macro news surface shows a significant improvement, downstream factories copy the bottom again to fill warehouses, thereby alleviating the pressure of refinery shipment, or will lead to a temporary rebound in propylene market prices. Therefore, Zhuochuang predicts that there is still a certain downward space for propylene market prices in the short term, and how to adjust the market in the future still needs to wait and see the news changes.