How will the PP market end in 2020?

In 2020, hot spots will appear frequently under the epidemic, and the domestic PP market has experienced ups and downs. The price bottomed at the end of March and reached its peak at the end of November. Entering December, although there is a clear trend of corrections on the market, most of the petrochemical ex-factory prices are still increasing, and the general purchases of downstream factories have remained normal. Merchants are not overly bearish on the market before, and they are generally considered to be rational fluctuations after the excessive rise. .

　　 1. Heavy pressure prevents bulls from going up, and the probability of fluctuations in the later period is greater

　　 From the perspective of the market, not only will OPEC gradually relax its production cuts in January, but even Iran and Venezuela will gradually resume their crude oil production and exports. Heavy pressure hinders the upside of crude oil bulls. Many analysts predict that oil prices will show signs of weakness after approaching $50, and the overall operating range may be between $46 and $50 in the future.

　　 2. The PP futures market is ups and downs, and the possibility of big ups and downs before the holiday is unlikely

　　 Throughout the year, the PP futures market has bottomed out and rushed higher, and the main trend is generally good. Short positions were strong in the first quarter, frequently approaching 2016 lows, but the market quickly rebounded strongly. Among them, the gains in April and November were particularly astonishing, with an increase of 20.27% in the previous month and an 11.42% increase in the latter. As far as the current trend of PP futures is concerned, if there is no special unfavorable news, there is little possibility of big ups and downs at the end of the year, and a rational transition may be the mainstream trend.

　　 3. The overhaul situation is significantly reduced compared with the previous month, and the spot supply will definitely increase

Excluding the long-term shutdown for maintenance, there are currently only 6 production companies and 7 production lines under maintenance. Among them, except for the extension of the Yulin start-up time to be determined, most of the devices will resume production before the end of the year. The estimated resource loss is about 110,400 tons, month-on-month. A reduction of 109,700 tons. The overhaul situation in December decreased significantly compared with the previous month, and the spot supply is bound to show an increasing trend, which will definitely have a certain negative impact on the market before the year.

　　4. Maintain the normal demand for orders, and the trading outlook will not change too much

　　 Affected by special factors in 2020, there are obviously more hot spots than in previous years. From masks to helmets, refrigerators to bicycles, and then "market economy", some raw materials were once in short supply. Although the duration is not long, it still brings a lot of speculative demand to the PP downstream industry. 2019 is about to come to an end, and market participants tend to have a stable life. Therefore, while maintaining normal demand for orders, the overall trading situation will not change much.

　　5. From the perspective of trends, the monthly decrease of polypropylene arrivals in Hong Kong may continue

　　 From a trend point of view, the volume of polypropylene arriving in Hong Kong is decreasing month by month. According to the latest port data, the total volume in October was about 569,600 tons, a decrease of 30.13% from the highest (June) this year. Among them, the import volume of homopolymer was about 391,000 tons, a decrease of 4.63% from the previous month; the import volume of block copolymer was about 161,200 tons, a decrease of 2.66% from the previous month; the import volume of other copolymers was approximately 17,400 tons, a decrease of 16.35% from the previous month.

　　 In the context of all parties, with the long and short news intertwined, it is unlikely that the market will fluctuate sharply at the end of the year. It is expected that domestic wire drawing/injection plastics, domestic copolymer materials, and imported copolymer materials may oscillate at RMB 8,750-9500/ton, RMB 9,200-10100/ton and RMB 9,400-12300/ton.