Opec and non-OPEC countries reached a global production cut agreement for the first time, which not only boosted international oil prices, but also stimulated a round of rising prices for downstream chemicals. Among them, domestic polypropylene futures in the beginning of this month again opened a rapid pull up mode, yesterday's futures price has risen by more than 20%. Driven by multiple positive factors such as the prominence of the support effect on the cost side, the relief of pressure on the supply side and the improvement of downstream demand, the future polypropylene price center of gravity will move to the top of the 10,000 yuan mark.The cost support effect is prominent
The production process of polypropylene is mainly divided into oil to olefin route and coal to olefin route. The recent agreement between Opec and non-OPEC oil producers to cut production for the first time in 15 years has led to a rapid rise in international crude oil. Since December, New York crude oil has gained 9.92%, recovering to near $52.6 / barrel; Brent crude also surged 9.90 percent to trade around $55.50 a barrel. The strength of crude oil prices led to downstream naphtha and propylene prices have followed. As an oil-to-olefin route, polypropylene prices naturally rise under the background of rising costs.
Supply pressure has eased, and downstream demand has improved
According to statistics, domestic polypropylene production in November this year was 1.43 million tons, down 1% from the previous month, of which wire drawing production was about 415,400 tons, down 3% from the previous month. At present, the price of coal and methanol prices have risen sharply, forcing the profits of the equipment that makes olefin to be compressed. It is expected that the production speed of polypropylene plants will slow down in the future, and the supply pressure will be significantly eased.
With the New Year's Day and Spring Festival holiday approaching, the terminal demand for packaging film will continue to improve. It is understood that the current downstream film factories, plastic enterprises and traders are optimistic, the market supply is good, product inventory is down, and the whole is in a tight balance. Downstream for raw material polypropylene replenishment willingness to increase, spot prices continue to rise.
In SUMMARY:
Benefiting from the cost-side support effect, supply pressure relief and downstream demand continue to improve the multi-factor drive, polypropylene market enthusiasm is expected to continue to increase. At present, the polypropylene price is in a rapidly rising state, and it is expected that the future will open the era of "ten thousand yuan" and become a veritable "ten thousand yuan household" variety.
