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Insight | Time: Apr 14 2021 4:03PM
Why BOPP film market weakens?
 
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Since April, BOPP film market has continued to decline. As of April 12, in East China, mainstream offers for thick film were around 10,600-11,200yuan/mt, down nearly 11% from the high point in March. The reason is, on the one hand, market price is high in the former stage; on the other hand, the raw materials continue to be poor after mid-March, and downstream demand turns weak after entering April.





As for the feedstock PP, although the market was supported by the plant maintenance, with the continuous decline of PP futures, feedstock PP price drops accordingly. On Apr 14, in East China, mainstream traders offer for homo PP raffia at 8,630-8,700yuan/mt. The decline in raw material prices also means the weakening support to the BOPP market from the cost side.



However, from the perspective of the cash flow of BOPP, although both feedstock PP prices and BOPP prices show a downward trend, the cash flow continues to weaken, the price spread between PP and BOPP market widens. BOPP film market drops further, which indirectly shows that the weakening of cost support is not the main reason for the decline of BOPP prices.



According to the feedback of some BOPP plants, although the price of BOPP continues to decline, the actual transaction has not improved significantly. Downstream do not have strong willingness to purchase, waiting for the appropriate price. From the above figure, we can also find that the number of BOPP orders has continued to decline since mid-March, which is the same as in previous years. According to the latest survey, most orders are about a week.

In the short term, both the cost side and the demand side are bearish in the BOPP market. Under the pressure of poor demand downstream, BOPP price may continue to drop. Of course, as the price spread between PP and BOPP market narrows, which supports the BOPP film market and the decline speed in the BOPP market may slow down.

[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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