Homo PP raffia and low-MFR co PP price spread expected to widen – ChinaTexnet.com
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Homo PP raffia and low-MFR co PP price spread expected to widen

2022-04-29 07:51:58 CCFGroup

Recently, the production proportion of homo PP raffia and low-MFR co PP has been reduced to a historical low, especially low-MFR co PP. However, with the growth of the production capacity, there are still some differences between the changes of production proportion and the actual change of supply. For example, the actual daily output of homo PP raffia is still at a middle level in the past three years, while low-MFR co PP is indeed at a historically low level.

 

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The changes in the supply side also partly explains why the price spread between Homo PP raffia and low-MFR co PP has widened recently. The change of the price spread depends on the change in the supply side on the one hand and the acceptance of the downstream on the other hand. With the growth of the production capacity, spot market has gradually changed from a seller's market to a buyer's market. In addition, downstream demand has been restricted due to the frequent outbreak of epidemics recently.

 

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Company Location Capacity (KTA) Shutdown Time Restart Time
Changzhou Fund Changzhou 300 2017.7.1 /
Sinopec Wuhan PC Wuhan 105 2021.11.12 /
Haiguolongyou #1 Daqing 200 2022.2.1 /
Hebei Haiwei Hengshui 300 2022.3.1 /
Sinopec Yangzi PC (YPC) #B Nanjing 100 2022.3.14 2022.5.28
Qingdao Jineng Technology I Qingdao 450 2022.3.15 2022.5.10
Sinopec Yangzi PC (YPC) #2 Nanjing 200 2022.3.15 2022.5.9
FREP Quanzhou 120 2022.3.15 /
Sinopec Hainan Refinery Danzhou 200 2022.3.16 2022.5.12
CSPC II Huizhou 400 2022.3.24 2022.4.30
Sinopec Yangzi PC (YPC) #A Nanjing 100 2022.3.25 2022.4.30
Dongming Hengchang Chemical Heze 200 2022.3.28 2022.4.30
Sinopec-SK (Wuhan) PC Wuhan 200 2022.4.1 2022.5.1
Haiguolongyou #2 Daqing 350 2022.4.3 /
Hebei Lihe Zhixin I Cangzhou 300 2022.4.3 /
PetroChina Dagang PC Tianjin 100 2022.4.8 2022.4.22
Xuzhou Haitian Xuzhou 200 2022.4.9 /
Zhongtian Hechuang #2 Erdos 350 2022.4.12 2022.4.21
Qinghai Yanhu Yanhu 160 2022.4.16 2022.4.24
PetroChina Daqing Refining & Chemical Daqing 300 2022.4.18 2022.6.5
PetroChina Dushanzi PC Karamay 70 2022.4.19 2022.4.27

 

As for the reduction of supply, on the one hand, it is due to the intensive turnaround of PP plants, which currently involves a production capacity of nearly 4.8 million tons per year, and the operating rate of the industry is close to 80%. On the other hand, there are not many plants produce low-MFR co PP. At present, there are only a few plants producing low-MFR co PP, such as Sinopec Tianjin Lianhe II, Shaanxi Yanchang ChinaCoal II, and Datang Duolun and so on; while Ningbo Fortune, Zhejiang Petroleum & Chemical, Hengli Petrochemical, PetroChina Dushanzi PC, Yan'an Energy & Chemical and Ningxia Baofeng Energy which used to be stable sources of low-MFR co PP in the past, have not arranged to produce low-MFR co PP recently. Some enterprises even cut off production for more than a month.

 

To put it simply, if the production of low-MFR co PP cannot be effectively increased, the shortage of supply of low-MFR co PP in the market will be gradually reflected. Although the current pandemic situation is not clear and the downstream demand is uncertain, the rigid market demand still exists, and the price spread between homo PP raffia and low-MFR co PP still expects to widen.

 

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