In September, the domestic general plastic market stopped falling and recovered. According to the general plastic index monitored by the business community, it was 851 as of September 9, up 6 points from 845 at the beginning of the month. The “golden nine” peak season was launched, and with the support of the Mid Autumn Festival holiday, the positive demand for downstream goods preparation improved. At the same time, the rising prices of ethylene and propylene as raw materials and the obvious positive support from the cost side are the main reasons for the rise.

The trading atmosphere improved, and the polyethylene spot market rose as a whole

The polyethylene market showed an eye-catching performance. The price trend of the three major spot varieties has improved. Since September, the overall increase has been 50-400 yuan/ton. Among them, LDPE rose the most significantly, by 2.28%, and LLDPE by 0.81%. Although the international crude oil price has weakened due to shocks recently, the rise of ethylene and coal at the cost end has brought benefits to the market. In addition, in the context of the “golden nine” peak season, demand is released, and the operation rate of downstream agricultural film is increased. At the same time, with the arrival of the Mid Autumn Festival, market transactions are also increased. Petrochemical enterprises have raised their ex factory prices, and the operators have a better mentality, and the quotations of merchants have followed suit.

Gradual expansion of demand, narrow rise of PP market

Recently, the operating rate of PP polymerization enterprises has not changed much, and the overall load of the domestic industry remains at about 77%. However, the price of propylene at the feedstock end rose, boosting the strength of PP. With the gradual expansion of demand in the peak season and the increase of stocking activities, some downstream factories of the terminal enterprises have lifted their power and production limits, and the overall load has increased. Among them, the operating rate of plastic weaving enterprises and BOPP enterprises has rebounded significantly, and rigid goods need to be centrally stocked. Demand led to the decline of PP inventory. According to statistics, the total domestic PP inventory has dropped to about 730000 tons so far. Traders responded to the increase in orders and a stronger mentality, and the offer followed the rise of petrochemical plants.

In the future, according to the 730 moving average rule of the business community, since June 19, 2022, the 7-day moving average of the general plastic index has crossed the 30 day moving average to start the downward trend, and the current two moving averages continue to go down in the same direction. It is estimated in September 4, 2022 that the probability of the change of operation situation (i.e. the 7-day moving average crossing the 30 day moving average) in the next 7 days is 31.79%. Analysts in the plastic industry of the business community believe that, with the end of periodic replenishment by downstream enterprises before the festival, market resource consumption is slow during the holiday period, and inventory pressure may increase, or it will bring some restraint to the rising market. The power of continued growth is limited, or it is mainly consolidation. More attention should be paid to the terminal demand.