Chine PE Market Forecast
Supply: Less maintenance plan will be in Q3, 2017. Although some units parked temporary last week, less units will be maintained next week. The 60kt/a FDPE unit at PetroChina Lanzhou Petrochemical keeps in maintenance. The 250kt/a LDPE unit at Zhongtian Hechuang Energy will be shut down. The 270kt/a LDPE unit at Shenhua Xinjiang Energy keeps in maintenance. The 50kt/a PE Line 1 at Sinopec Shanghai Petrochemical keeps maintenance until late Aug, and its 250kt/a HDPE unit will be restarted next week. Shenyang Chemical will keep offline for 5 days amid changing the production line. The expected decreases in supply will be 14.5kt next week. The import volume in the next week is expected to be stable.
Demand:In terms of the agricultural film, the demand rose slowly. The operating rates at film factories were limited by the environmental protection inspections. The factories purchased based on needs amid the cautious attitude.
Overall, the upstream crude oil market keeps moving down, giving some pressure to the spot PE market. On the supply side, the total supply is stable. On one hand, concentrated turnarounds decreased. On the other hand, imported source of goods increased from last year. The import volume of PE is expected to keep rising in Q3, 2017. On the demand side, the environmental protection inspections have expanded from North China to the other areas. Inspectorates have arrived at Zhejiang in August, and the duration was heard for a month. Many enterprises were shut, and thousands of factories were influenced. At present, the plastic market outlook is not clear under the environmental clean-up actions, so the users should be prudently on stocking up and inventory level. The Chinese PE market will keep volatile next week. The mainstream LLDPE prices will be RMB 9,350-9,850/mt.
China SM Market Forecast
Players adopt bearish stances on the crude oil price.
Operating rates of the packaging industry will see notable declines in Xiamen and surrounding regions with the BRIC Summit coming. The strict environmental protection inspection will restrict the operating rates of EPS and UPR industries in Shandong, Beijing, Tianjin and Hebei. On the whole, the EPS industry will probably present weaker demand for styrene. Production and sales of the ABS industry appear brisk. The operating rate of PS industry is likely to improve with the unit at Renxin Polystyrene and Sabron Petrochemical restarting.
About 34kt of imported shiploads are expected to arrive at Jiangsu next week. The styrene stocks at the main ports of East China should hover at the current level, given that the consumption volume at ports is about 27kt per week.
The overall commodity market trend will play a key in guiding the styrene market next week. The styrene market price will stay at highs with limited ups and downs.
China Methanol Market Forecast
In the major producing areas, the methanol production is steady at present, and the products are mainly supplied to local olefin plants. The producers in the northern part have no inventory pressure, while the inventories in the southern part are stable-to-rising. It is predicted that the methanol prices in the major producing areas are not very likely to continue to rise next week. In other inland areas, the operating rates of some downstream industries slipped due to the environmental protection inspection, so the consumption of methanol slowed down. In such a climate, the methanol producers operated cautiously. Thus, the methanol offers at the producers may drop slightly next week. However, the negotiation prices may keep moving sideways, as the transportation vehicles are fewer. The overall methanol trading can hardly improve. The prices are estimated in the range of RMB 1,980-2,100/mt in Inner Mongolia and RMB 2,220-2,330/mt in Shandong next week.
In the coastal areas, except the restocking on rigid demand, the consumption of inventories is slow. Moreover, imported methanol cargoes will arrive intensively in H2 August, so most players with complicated mentalityare still cautious about the speculation and purchasing. It is predicted that the spotprices may fluctuate in the range of RMB 2,450-2,550/mt in the coastal areas next week.