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Insight | Time: Nov 22 2022 4:37PM  Editor:Amber
PP to keep consolidation with little change in fundamentals
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In Nov, PP market remains weak and is deadlocked as a whole. In the middle of the month, China has issued a new epidemic prevention and control policy, causing commodity market and stock market to rise, and PP is no exception. However, the growth is limited on the whole. At the beginning of the second half of the month, due to the impact of tighter prevention and control of the epidemic, strong expectations were outweighed by weak situation and market confidence was suppressed again. Commodity futures opens low and then moved down, and PP spot also falls downward under the drag of futures. On Nov 21, mainstream traders offer for homo PP raffia at 7,730-7,800yuan/mt, and some lower at 7,700yuan/mt.


Combined with the current available news, there is little change in fundamentals.


First, the operating rate is relatively stable

Plant operation(11.1-11.21)
Company Location Capacity(kta) Shutdown Restarted Note
Sinopec Jingmeng PC Jingmen 120 2022.11.1 / shutdown
Hebei Haiwei Hengshui 300 2022.11.6 / shutdown
Zhejiang Petroleum & Chemical  II #2 Zhoushan 450 2022.11.8 / shutdown
Sinopec Zhenhai (ZRCC) #3 Ningbo 200 2022.11.12 2022.11.27 shutdown
FREP Quanzhou 100 2022.11.13 / shutdown
Sinopec Yangzi PC (YPC) #B Nanjing 100 2022.11.14 / shutdown
Sinopec Zhongyuan PC(old) Puyang 60 2022.11.14 / shutdown
Sinopec-SK (Wuhan) PC #JPP Wuhan 200 2022.11.16 / shutdown
Changzhou Fund Zhangzhou 300 2017.7.1 2022.11.1 Restarted
Oriental Energy II #1 Ningbo 400 2022.10.17 2022.11.3 Restarted
Shenhua Xinjiang Urumchi 450 2022.10.23 2022.11.10 Restarted
Sinopec Zhongyuan PC(new) Puyang 100 2022.10.23 2022.11.16 Restarted
Qinghai Yanhu Yanhu 160 2022.10.12 2022.11.17 Restarted
Sinopec Yanshan PC #2 Beijing 50 2022.9.21 2022.11.18 Restarted
Sinopec Maoming PC #3 Maoming 200 2022.10.28 2022.11.18 Restarted
Sinopec Guangzhou PC #3 Guangzhou 200 2022.11.1 2022.11.7 Restarted
PetroChina Daqing Refining & Chemical Daqing 300 2022.11.1 2022.11.7 Restarted
PetroChina Liaoyang PC(new) Liaoyang 300 2022.11.7 2022.11.15 Restarted
FREP #2 Quanzhou 220 2022.11.8 2022.11.10 Restarted
PetroChina Lanzhou PC Lanzhou 300 2022.11.16 2022.11.19 Restarted


Since November, the overall operating rate of PP is relatively stable, basically maintains 86-88%. The production proportion of homo PP raffia is still less than 30%, and the spot supply is relatively stable.


Second, the inventory level is below the medium level.



At present, both inventory of PP and PE in China domestic coal chemical and private petrochemical plants and inventory of polyolefin (mainly PP and PE) in Sinopec and PetroChina are at a moderate lower level, which does not constitute substantial pressure on the market.


Third, there is no significant changes in downstream demand.


Taking downstream BOPP as an example, most plants maintain normal production, and the operating rate has not changed much. In terms of orders, since November, the orders of BOPP film plants have decreased to a certain extent, but the decline is relatively small. Currently, the orders of BOPP film plants are around 5-10days, some higher at around 15days, and they purchased the feedstock PP on need.


To sum up, at present, the fundamental change of the PP market is limited, the supply and demand side continues to play the game, and the market may keep range bound in the short term. In addition, traders are suggested to pay attention to the macro policy changes in time. Under the current situation, the change of the macro environment may have become the most important factor in determining the market trend.

[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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