Polypropylene prices hardly a trend reversal

Dalian Commodity Exchange has approved the listing of polypropylene futures , February 28 will be officially listed for trading . Comprehensive look at all aspects of the current situation , although the short-term price of polypropylene prices stabilized, but the polypropylene industry destocking state, the outlook is hardly optimistic.

Domestic PP prices over the past year has experienced a continuous rise in the process , and peaked in mid-December 2013 , East narrowband class homopolymer polypropylene Sinopec offer 12,250 yuan / ton. After slowing demand due to the continued backlog of inventory , petrochemical Hutch listed prices continue to drop , as of press time , Sinopec East China quoted 10,800 yuan / ton. Despite the recent rumors petrochemical planes again resorted to limited production banner, hoping to reverse the trend of falling prices , but we believe in the market as a whole in the process of destocking , domestic PP prices have not yet bottomed out , investors still fall.Sellotape

From July 2010 to January 2011 , the market experienced a restocking phase , which lasted seven months ; May 2013 -2014 in January is also an obvious replenishment cycle , which lasted nine months. And replenishment phase corresponds to a gradual rise in prices , inventory and gradually raise . The January 2011 -December is a long inventory cycle lasted 12 months , the market is sluggish , prices continued to fall , January 2013 -May experienced a five-month period to the inventory cycle , and its price performance market conditions in 2011 are very similar to the inventory cycle .

Polypropylene market is currently destocking early . According Wande data show that domestic polypropylene society as a whole since May 2013 inventory to the chain gradually climbed to January 2014 the growth rate peaked in mid- February into the ring than the growth rate fell to 10.83% , but this growth is still in peak of nearly 5 years. We compare historical data to the inventory of stocks were never in the case of a positive end . Therefore destocking phase polypropylene in the future , polypropylene prices will gradually lowered shocks .Washi tape

From the supply side, the current domestic polypropylene market still in the petroleum, petrochemical dominant . 2013 , Sinopec capacity at 6.405 million tons , accounting for 46% of total capacity ; at 3.95 million tons of oil , accounting for 28% of the national total ; precisely because petrochemical planes on the market dominance determines the long term domestic polypropylene wide range of prices to the main shock , the inventory cycle is very long away . The main reason is that the major domestic petrochemical planes as polypropylene supply side , strong efforts to control prices , reluctant to substantial price cuts , the initiative to accelerate to the inventory . But the price artificially block down the process , resulting in more expensive downstream for boycott , thus delaying the destocking process.

Recent market rumors , PetroChina , Sinopec will limit production again , the domestic petrochemical product prices rebounded . This being our aforementioned artificial barrier destocking process conditions. At this stage due to the lower demand side terminal inventory , and started to increase after the Spring Festival Society , leading short-term price rebound or continuation , but destocking trend is difficult to change , so hard to change the short-term rebound in the price of polypropylene term downtrend .Masking tape

From the downstream demand, with a narrow band of polypropylene as raw material widely used class of grain , fertilizer , cement, sugar , salt, minerals and industrial materials and packaging . So polypropylene downstream demand and macroeconomic trends are closely related. And there is little seasonal demand cycle. February 2014 HSBC PMI new orders reported 48.1 . This is the first time below 50 since August 2013 line ups and downs . Downstream processing chain of polypropylene polypropylene material based mainly on demand procurement , procurement of raw materials and then there are new orders , HSBC PMI new orders fell below 50 , meaning that the macro or polypropylene downstream demand will slow . In the absence of supporting downstream demand , the market price of unspeakable to the good.

From the overall perspective , the current polypropylene in the early stages of destocking , prices are medium-term trend . In the short term , there is very price will petrochemical planes may lead to short-term rebound in the market price , but you can not change the medium-term trend .Wholesale masking tape