POM/ABS/PP Plummeted by Up to 1300 Yuan

The CPI and PPI data released by the United States this week have exploded one after another. Inflationary pressure has caused a surge in the market’s expectations for a sharp 100 basis point interest rate hike by the Federal Reserve at its July meeting, which has aggravated investors’ concerns about a recession. Four fell sharply again, continuing the downward trend!

WTI crude oil fell by more than 5% on the day to $91.44 per barrel, while Brent crude oil fell by 4.5% on the day to $95.06 per barrel. Currently, oil prices have fallen below the key 200-day moving average and hit the lowest level since the outbreak of the Russian-Ukrainian conflict. Prior to this, both WTI crude oil and Brent oil had fallen into a technical bear market, falling more than 20% from the high point.

Affected by the sharp drop in crude oil, the domestic energy and chemical futures market suffered a severe setback. Shanghai nickel fell by nearly 12%, iron ore fell by more than 10%, plastics, PTA, and polyvinyl chloride (PVC) fell by more than 4%, and polypropylene fell by more than 3%!

On the side of the plastic spot market, the Dongguan POM market continues to collapse today! Demand continued to be weak, and merchants had more room for profit margins, which made the situation worse for many brands. POM/Tangshan Zhonghao/K270 fell by 1,000 CNY/ton in a single day; POM/Nantong Baotailing/M90-44 fell by 1,300 CNY/ton in a single day.

ABS market prices fell across the board, with an overall decline of 100-500 CNY/ton. This week, the market demand was weak, and there were not many inquiries about prices. At present, in the off-season of home appliance procurement, terminal home appliances are under-operated, and the demand for ABS has been greatly reduced; ABS prices continue to fall, and petrochemical plants are under huge cost pressure. At present, the apparent profit is close to the manufacturer's cost line, and some manufacturers have experienced load reduction. 80% or less. This week, the price in the East China market was 12,010 CNY/ton, down 320 CNY/ton from the previous month; the price in the South China market was 11,112 CNY/ton excluding tax, down 288 CNY/ton from the previous month.

The price of PP market in Dongguan fell overcast, crude oil fell sharply during the session and closed down, the market trading atmosphere turned weak, limited demand lacked driving force for the price, and the spot continued to fall, but the decline narrowed. PP/Zhongke Refinery/EP300H fell by 150 CNY/ton in a single day.

A plastic trader in Zhangmutou, Dongguan, said that many customers are now waiting and watching, waiting for the opportunity to buy the bottom. Buying up and not buying down is a common problem for buyers in the industry.

The owner of an electrical screw factory said that his customer factory began to "transform" in March, from single to double holidays, and then to rotation. At this time in previous years, the average monthly order volume was around 20 million. Since the spring of this year, there have been no more than 10 million. In May, there were only more than 4 million, which is about 20% of the usual.

When the market continues to slump, everyone's expectations for the peak season in the second half of the year are gradually disappearing. No one can give a definite answer on how long this "summer vacation" will last.