China Market Reports 18 Sep 2017

Chine PE Market Forecast

Supply: Less maintenance will be in next week. The 60kt/a FDPE unit at PetroChina Lanzhou Petrochemical will keep shut. The 100kt/a LDPE unit at Sinopec Shanghai Petrochemical will be shut. The 300kt/a FDPE unit at Shenhua Baotou Energy will be maintained. The 250kt/a LDPE unit at Zhongtian Hechuang Energy will be parked. The expected decreases in supply will be 13.6kt. The import volume in the next week is expected to increase, mainly on HDPE and LLDPE source of goods. The imported sources are expected to arrive to the port in H2 of September.

Demand:In terms of the agricultural film, demand from shed plastic film users continued to rise, and the demand for mulching film warmed up. The number of orders and operating rates from producers increased somewhat, which would support the feedstock market.

Overall, the upstream crude oil prices kept volatile, giving limited support to the PE market. On the supply side, the overall market supply was still ample. Most producers ran normally. Besides, the import volume increased from last week. Additionally, the newly-added PE units at Shenhua Ningxia Coal Industry have finished trial running, so the market supply might increase further. From the demand side, although the environmental protection supervision weakened in some areas, the overall demand wasn’t improved a lot. Many downstream users have finished stocking up in advance, so the replenishment volume in the short term might be limited. The Chinese PE market will keep volatile next week. The LLDPE prices will be RMB 9,750-10,450/mt.

China SM Market Forecast

Players adopt strong wait-and-see attitudes at present. Downstream users’ resistance to the current price level and short selling at Huaxicun Commodity Contracts Exchange cause great downward pressure to the styrene market. Moreover, the constant decreases in the spot market react on the futures market again. However, the spot supply remains tight and is not likely to ease in the short run. Mainstream traders continue their procurement in the spot market. Some players hold that the current market price has resumed to a rational level. Players should eye on the overall futures trend.

China Methanol Market Forecast

In Northwest China, the methanol inventory is at a reasonable level, and the supply is predicted to be stable next week. The demand from local olefin production is fine, and some plants intend to stock up before the National Day holiday. Thus, local methanol prices still have upside potentials next week. In other inland areas, the methanol supply is stable-to-rising. The demand from the olefin plants is fairish, but traditional downstream users just maintain basic purchases. On the whole, the methanol negotiation prices may adjust at a high level. The prices may be RMB 2,5002,520/mt in Inner Mongolia and RMB 2,680-2,770/mt in Shandong next week.
In the coastal areas, the downstream resistance to high prices dragged down the market this week. However, the former favorable news is still supporting the market, so the methanol prices are not very likely to drop quickly. We estimate that local methanol market may continue to fluctuate at a high level next week, and the prices may be in the range of RMB 2,800-2,950/mt.

Cxhina MEG MArket Forecast

MEG supply remains ample in Sep while inventory/sales ratio keeps low. Buying sentiment improved as some polyester enquired with price falling. Some trader still need to cover shorts with the approach of delivery. However, falling commodity prices still weigh on market sentiment. MEG price might rebound in short term, while average price could be a resistance line. Eyes could rest on commodity price movement, buying from polyester plants and polyester product sales ratio.

Sep 19, 2017 08:28
Email is required
Characters left: 500
Comment is required