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China Market Reports 2 July 2017

Chine PE Market Forecast

Supply: In the next week, the 60kt/a old FDPE unit at PetroChina Lanzhou Petrochemical keeps in maintenance. The 140kt/a LDPE unit at Sinopec Qilu Company keeps in maintenance in April due to the compressor failure. The 150kt/a HDPE unit at Shanghai Jinfei Petrochemical will be restarted on April 10. The MTO unit at Sinopec Zhongyuan Petrochemical keeps in maintenance. The 1PE unit at Sinopec Shanghai Petrochemical is planned to be overhauled from April 6. The expect decrease in supply will be 8kt. The import volume in April is expected to decrease M-O-M, due to the low buying interest at PE traders because the spot PE prices were low after the Spring Festival holiday but the international
PE prices were high.

Demand: In terms of the agricultural film, the operating rates at mulch film factories gradually decrease in line with the declined mulch film demand. The mulch factories purchased the raw materials based on the need.

To sum up, the upstream crude oil market performed well in recently, and the crude futures prices might go upward. In terms of the supply side, the inventory level at petrochemical companies, ports and traders was still high, but that at downstream factories was low. There will be intensive turnarounds of PE units at petrochemical companies in April, so the market supply should become tighter. But considering about the soft demand for PE at downstream markets, the market supply is expected to be sufficient. The ex-works prices at petrochemical companies are expected to be stable at the beginning of April. The PE market will be range bound next week. The mainstream LLDPE prices may move within the range of RMB 9,150-9,700/mt.

China SM Market Forecast

Though the styrene stock at the main ports of East China has slightly grown this week, it is expected to decrease later, as less imported resources will arrive next week.
The Chinese benzene market has also gained ground, lending strong cost support to the styrene market.
However, orders from EPS, PS and ABS producers fail to see notable improvement. That will restrict the upward space of the styrene price.
The Chinese styrene price is likely to fluctuate upward next week.

China Methanol Market Forecast

In the inland areas, the methanol market saw a small rebound recently, and the sales pressure on most producers was eased. At present, the major downstream demand is comparatively stable. The market may continue to move up after the holiday if there is downstream restocking demand. However, most market players are still cautious about the operation, and paying attention to the overhaul plans of the MTO units. SCI considers that the prices will fluctuate in the range of RMB 2,450-2,600/mt in Shandong and RMB 2,250-2,350/mt in Inner Mongolia next week.
In the coastal areas, the market gradually stabilized this week, supported by the intensive short-covering demand, large amounts of transit goods and market players’ expectation on the stop in price falling. However, the news that the two major MTO units in the coastal areas are scheduled to take overhauls in April has brought some negative influences. It is predicted that the methanol prices in the coastal areas may fluctuate within the range of RMB 2,600- 2,700/mt next week amid bearish sentiments.

Jul 3, 2017 13:45
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