Buoyed by the lack of supply in the stage, polypropylene futures have recently rebounded strongly, but considering that the new production capacity is concentrated in the third quarter and the futures price is compared to the spot premium, the price of polypropylene futures is limited, and it may peak in the near future.
The supply shortage is expected to ease.
Due to the closure of some enterprises and the sharp decline in petrochemical inventories, the polypropylene market has experienced a problem of insufficient supply. Driven by this factor, polypropylene futures rebounded strongly. As of the close of June 28, the main 1609 contract closed at 8067 yuan/ton, up 1755 yuan/ton from the low point on May 24, an increase of 27.80%.
However, in the future, the problem of insufficient supply will ease.
First, this year's new polypropylene production capacity is concentrated in the third quarter of production. Among them, Jiangsu Pengcheng's production capacity of 80,000 tons/year is planned to be put into operation in July; Fude Chemical 300,000 tons/year production capacity plan in July to August; Zhongtian Hechuang's capacity of 700,000 tons/year and Huating Coal's capacity of 200,000 tons/year are planned to be put into operation in the third quarter. In addition, Shenhua Xinjiang's device has been officially put into use, and the product is expected to be put on the market in August. With the successive production of new capacity, the supply of polypropylene in the later stage will gradually ease.
Second, polypropylene is transferred from petrochemical to downstream enterprises. The recent sharp decline in polypropylene petrochemical inventories is the main reason for the rise in polypropylene futures prices. However, although some devices are repaired, the amount is not large, and the downstream demand for plastic knitting, copolymerization injection molding or BOPP is not significantly improved, but relatively weak. The main reason for the sharp decline in petrochemical inventories is not the reduction of supply or the improvement of downstream demand, but the transfer of petrochemical inventories to social inventories. Early polypropylene prices are at a low level, some enterprises a small amount of replenishment, and with the price recovery, driven by the psychology of buying up and not buying down, downstream enterprises concentrated replenishment, making the petrochemical inventory decline. Once there is a corporate expansion or macro negative events, polypropylene prices will end the rise.
Futures have been upgraded to spot.
At present, the polypropylene futures premium spot, as of June 28, the average spot price of polypropylene in East China is 7692 yuan/ton (Zhenhai refining T30S spot price is 7800 yuan/ton, Shaoxing three yuan T30S spot price is 7750 yuan/ton), and the futures price is 375 yuan/ton compared to the spot price premium.
In such a spread environment, cash arbitrage has been profitable. If futures prices continue to rise, traders will continue to move in to arbitrage.
Futures sharply premium spot, funds continue to push up the risk of polypropylene prices, is likely to stimulate traders in the futures market delivery.
Under the background of the overall weakness of commodities, the upward space of futures prices is limited by spot.
