Oil Prices Fell 10% This Week! The Operating Rate Hits A New Low! Is Polyolefin Finally Going Up?

The operating rate of production enterprises is at a record low, and short-term demand may not improve

In terms of PE supply, the number of maintenance devices increased this week, and the amount of maintenance losses increased by 13,900 tons compared with the previous month. The current maintenance capacity exceeds 20%, and the weekly maintenance loss is at a high level during the year. The maintenance of refining and chemical enterprises will be reduced next week, and the loss of maintenance is expected to decrease by 13,400 tons month-on-month. In terms of demand, the demand for agricultural film continued to follow up, and the start of agricultural film construction increased by 2%. In addition to agricultural film, the mainstream construction of downstream industries is 36%-59%. The demand for shed film is improving, and some factories have accumulated orders for high-end film. The downstream demand for other PEs is weak, and a small amount of just-needed purchases are maintained.

In terms of PP supply, the operating rate of polypropylene production enterprises fell to the low point of the year. This week, the output of PP was about 545,700 tons, a decrease of 3.34% from the previous month, and the maintenance loss reached a new high. Supply is expected to continue to decrease next week. In the short term, the supply pressure in the market has eased, which will form a favorable support for polypropylene prices. On the demand side, factory orders are not good, finished product inventory is still high, and companies are cautious in receiving goods. At present, the raw material inventory of downstream factories is between 5-10 days, and the demand is not expected to improve in the short term.


Inventory accumulated slightly this week, petrochemical inventory may still increase next week

On Thursday, petrochemical inventories were 660,000 tons, an increase of 50,000 tons from the same period last week. PE inventory pressure has increased, petrochemical inventory, port inventory and social inventory have accumulated slightly. The total inventory of the PP industry is also on the rise.


Weakening of cost support, short-term polyolefin may fluctuate down

OPEC+ supports oil prices by controlling production, but the situation of lower demand cannot be changed. Oil prices will mainly fluctuate slightly or weakly next week, and the cost support for polyolefins will weaken. In terms of basis, the spot price remained stable, and the futures volatility caused the basis to hover at a low level. The PE basis in South China was 200-300, and the PP basis was 100-200. Among them, the 09 contract's early point price order appeared centralized covering, and the price difference between the 01 contract and the 09 contract moved with the position of the relocation and extension, and experienced the process of expansion and recovery.