Polypropylene collapses at the cost end

At the end of March, the polypropylene futures price fell rapidly after a rebound, showing a V-shaped reversal, rebounding from the bottom of nearly 2,000 CNY/ton, the speed of the rebound and the magnitude of the rebound are breathtaking. The recent high price of polypropylene futures is mainly under pressure, mainly due to the hype fluctuations in demand for polypropylene fiber materials caused by the shortage of the core material of the mask.


Meltblown cloth hype cooling


Medical surgical disposable masks and N95 masks have a three-layer structure. The protective core is the meltblown cloth layer. The meltblown cloth can be called the "heart" of medical surgical masks and N95 masks. Its production material is meltblown polypropylene. With the spread of public health events around the world, the demand for masks has surged and stimulated the demand for melt-blown fabrics. The production capacity of melt-blown fabrics was limited in the early stage, so that the price of melt-blown fabrics increased from 20,000 / ton to 700,000 CNY/ton. Generally speaking, a mask with sufficient material requires 20g of polypropylene fiber material. According to data released by the National Development and Reform Commission, the domestic mask output is 100 million pieces / day. According to this calculation, 100 million masks require about 200 tons per day. Polypropylene fiber material, and the output of polypropylene in 2019 is about 23 million tons, the demand only accounts for about 0.3% of the polypropylene output, and the demand accounts for a relatively small amount. However, driven by profits, inferior meltblown fabric production enterprises have proliferated. According to incomplete statistics, the demand for fiber materials has increased by nearly 50 times in a short period of time, resulting in a tight supply of fiber materials, increasing the proportion of fiber materials production and compressing the delivery of standard products Production, promoting a sharp rebound in polypropylene prices in the early stage.


With the introduction of regulatory policies and strengthening the export supervision of medical protective substances, mask workshop enterprises are restricted. In addition, the Yangzhong region of Jiangsu has opened a melt-blown fabric production enterprise for rectification. Unlicensed companies in the region have ceased production, and the demand for fiber materials will decline. The supply of fiber materials at the supply end accounts for about 40%, and the daily output exceeds 20,000 tons. The mismatch between the supply and demand of fiber materials can be alleviated. At the same time, Sinopec will add 10 meltblown fabric production lines, with a total of 16 production lines. The new production line will be gradually put into operation in May. Market speculation sentiment has cooled, meltblown fabric prices have dropped significantly, and civilian meltblown fabrics have dropped to 400,000 yuan. / Ton, the medical meltblown cloth was reduced to 550,000 CNY/ton, and there is still room for falling in the later period. Therefore, the non-polypropylene traditional hype caused by masks has cooled down, weakening the polypropylene price support.


Weak demand suppresses prices


From the supply side analysis, the domestic polypropylene plant load was about 86% last week, an increase of 2 percentage points month-on-month, and at the same time there was less overhaul of the device. There is still no new overhaul device in the future; PDH and oil-based equipment have better profits, and the load will continue in the future The increase, coupled with the addition of new production capacity, has put pressure on supply. With regard to supply structural issues, the current fibrous material situation has receded, and the proportion of fiber production has fallen from a high of 50%, and the proportion of drawing has rebounded. As the demand for fibers continues to cool down, the proportion of drawing production is expected to rise further in May. Delivery will be smooth.


From the traditional demand point of view, previously affected by the sharp short-term increase in polypropylene prices, BOPP, plastic weaving and other traditional downstream to respond to reduce production, and as raw material prices fell, downstream operating rates returned to normal levels. At present, overseas public health incidents are still spreading and the export of polypropylene products is blocked. Later weak demand will still suppress the price of polypropylene.


In addition, due to public health incidents, the demand for crude oil has plummeted, the storage capacity has become urgent, the price of crude oil has fallen, and the cost side of polypropylene has collapsed.