From polypropylene fiber boom to see where polypropylene goes

Polypropylene futures bottomed out at the end of March, and the market realized a V-shaped reversal in just two weeks. The fast-moving and wide-ranging ambassadors in the spot and futures industries all marveled at "seeing for a long time."


With the continuous spread of foreign public health incidents at the end of March, China increased foreign aid for medical supplies, and the demand for melt-blown fabrics that had been extinguished exploded again. . The increase in meltblown fabric prices has driven the demand for polypropylene fiber materials to rise rapidly. Domestic equipment has increased production in response to market demand, but it is still difficult to stop the rapid rise in polypropylene fiber materials. Among them, the "net red material" Shanghai Secco S2040 Around 7,000 CNY/ton has risen to over 25,000 CNY/ton, and it is still hard to find.


Speaking of risk factors, it is still necessary to go back to fiber material and melt-blown cloth. At this stage, the price difference between fiber material and wire drawing is more than 2,000 CNY/ton. From the analysis of the production drive of the device and market demand, fiber materials will continue to squeeze the proportion of standard drawing, and unlike the previous background of "harvesting goods to the people", standard drawing is currently in a low state in each inventory link. Therefore, at the stage close to the delivery month, the commodity attributes and financial attributes of futures are conducive to the rise of polypropylene futures and spot. However, due to the recent rapid rise in the meltblown cloth market, manufacturers of non-medical grade meltblown cloth have sprung up. At the same time, many European and American countries have canceled the FDA and other qualification certifications for masks and other protective products in China and detected the export of China ’s exports. Some protection products do not meet the standard. The Ministry of Commerce issued the latest notice. From the early morning of April 10th, KN95 masks do not allow CE, FDA, FFP2, FFP3 and other words on the laser coding, and only permit the printing of the mask ’s own implementation standards and masks. Type, and each batch of masks delivered from the factory shall be sampled for commercial inspection and a test report shall be issued. Without a commercial test report, the factory shall not be allowed to leave the factory. The operator who violates the regulations will be severely punished and his certificate and certification will be revoked. At the same time, the local government began to rectify the Sanwu family workshop-style meltblown cloth and mask production enterprises.


Under the rectification of the meltblown fabric market, the non-compliant finished products produced in the early stage and the downstream mask export will be blocked, and a backlog of inventory will form, and the market's demand for fiber materials will inevitably decrease. Then when the demand for fiber materials declines, petrochemical enterprises will re-increase the production ratio of wire drawing, which will ease the tension of standard products. According to the current domestic official data, the mask production capacity is about 200 million pieces / day, and it is estimated that the demand for fiber materials is about 200 tons / day, including the recent rapid expansion of local non-compliant melt-blown small workshops for fiber materials, even if the data Doubled, there is only 400 tons / day demand for fiber materials. At this stage, the proportion of domestic fiber material production is close to 40%, and the domestic average daily output of fiber material is about 20,000 tons. The oversupply situation is obvious. Polypropylene of various domestic brands has been rising day by day, and the internal and external disks have basically hung up. After the import window is opened, it is foreseeable that the domestic polypropylene arrival volume will increase significantly at the end of April and the beginning of May.


Judging from the current position and spot market conditions, the bulls have obvious advantages. It is still questionable whether the domestic conversion and the arrival of foreign disks in Hong Kong can be connected to the recent month contract, but what can be determined is that the far-month contract will be significantly negative. In the future market, you can pay attention to whether there will be indicators of reversal: 1. Contracts in recent months have begun to significantly reduce positions, 2.5-9 positive spreads have contracted, 3. The proportion of petrochemical equipment production and drawing has increased, 4. The release of regular melt-blown cloth production capacity to expel poor quality products The demand for fiber materials.


In addition, government administrative measures to rectify the inferior meltblown cloth market, the negative impact of the rapid growth of international public health events on the global economy, global first-quarter economic data, the overall polypropylene supply is not low, and high valuations are all negative factors. Any of the swords of Damocles hanging on the spot industry and the bulls can become a fuse for the market. Investors need to be more rational and less greedy. Suggestions for futures operation: 1. The radicals are 5-9 sets, 2. Opportunity to buy put options, 3. Waiting for 2009 short hedge opportunities.