After March the supply pressure will significantly reduce the plastic deposit is expected to rebound

after the Spring Festival holiday, the domestic commodity market a Chunyiangran, agricultural products, such as ferrous metals generally rebounded, but the plastic was weak, led by variety became the main reason is that during the Spring Festival, the supply pressure increases sharply, inventory accumulation, poor downstream demand.

In February, the plastics market or the continuation of weak trend, but later with the maintenance season, demand is expected to improve, gradually digest inventory pressure, plastic fundamentals are expected to achieve from the “no” to the “Thai” transformation, prices are expected to rebound.

After March the supply pressure will be significantly reduced

Before the Spring Festival, the domestic polyethylene plant maintenance enterprises involved less PE equipment maintenance rate temporarily stabilized to 1.8%, mainly in the temporary parking. The polyethylene industry operating rate of more than 98% in the market supply pressure is not reduced, this is one of the reasons for weak plastic prices. But after March, with the arrival of the polyethylene market maintenance season, the overall supply will relieve the pressure. 2017 polyethylene plant maintenance mainly concentrated in 3 – June, enterprise maintenance plan is relatively more. The maintenance plan has to include Shaanxi Yulin 300 thousand tons of LLDPE plant, Qilu Petrochemical 650 thousand tons of production capacity, the density of Yangzi Petrochemical 500 thousand tons of linear and high pressure, Fushun Petrochemical 940 thousand tons full density.

The new capacity put in the first half of this year, domestic polyethylene invest in new capacity is not much, only the April transit co-founder of a set of 370 thousand tons of high pressure device plans to put, even if the new capacity put into production on schedule, but some hedge maintenance capacity, there is no real impact on the total supply. In fact, the new launch capacity remains uncertain, the past three years of domestic polyethylene in the first half of both no actual capacity put, put some plans during the first half of the second half of the production capacity is often delayed until delivery. Therefore, although the current market supply pressure polyethylene, but after March the supply pressure will be significantly reduced.

The Lantern Festival will gradually rise from the low demand

Affected by the Spring Festival, LLDPE downstream operating rate dropped significantly, the recent film started in the rate of 50%, lower than the same period last year 55%; agricultural operating rate is about 50%, also lower than the same period last year the level of 55%. Just downstream from LLDPE, the seasonal demand characteristics, general demand is February trough, March is the peak of demand, mainly due to the Spring Festival and the Lantern Festival effect, from the low demand will gradually rise, the demand is expected to improve in just a matter of time.

From the disk, because the current demand in the doldrums, plastic spot and futures prices are weak, North China recent spot price has dropped to 10000 yuan / ton, but the price drop but is conducive to traders and downstream enterprises to actively promote material delivery, demand.

Sinopec is expected to gradually digest inventory pressure