The main reason for the decline in the polypropylene market is elusive

First, the main influencing factors that triggered the "peak season" downtrend

Downstream orders, the downstream factories in March were subject to orders, and the start-up was less than expected, restricting the progress of market transactions. Most general-purpose materials companies are constrained by the meager profits and the lag in orders and sales, which restricts the circulation of raw materials in the market. The “two barrels of oil” continued to be high after the stock holiday, and it remained at a high level after consumption in February. Increase the sales pressure of petrochemical and oil companies. The petrochemical policy was suppressed by the long-term "two barrels of oil" stocks. At the end of February, the petrochemical and China oil policies continued to cut downwards, dragging down market offers, and merchants worried about the increase in sentiment and dragged down market offers. Futures' decline, March is the peak season of demand, but the futures are affected by the profit-taking of the Baobao merchants, which intensifies the pressure on the supply of resources in the spot market. The futures continued to fall in early March, giving the market traders a huge pressure on their mentality.

Second, how does inventory affect the market?

As can be seen from the above figure, after the 2017, the polypropylene market showed a high trend, while the market drawing price also showed a rapid decline at the high level of inventory. Due to worries about the market outlook, the factory orders started to lag, resulting in a high inventory of “two barrels of oil”. The normal inventory of 600,000-700,000 tons is the maximum profit of petrochemicals, and the most ideal inventory, but the current inventory is indeed high, it is difficult to give The market has sufficient reasons to let the market rebound.

3. When is the counter-attack in the market?

The market started relatively slowly in March, which made it difficult for the "two barrels of oil" stocks to rise. The petrochemical and China oil policy was affected by the sales pressure, and the policy was quickly lowered, which made the market offer decline. However, at the same time, the start-up of downstream factories in March is gradually recovering, and the maintenance enterprises are gradually concentrated to provide support for the supply of goods in the market. Therefore, it is expected that the market will rebound in the middle and late March, and the market is currently testing the market price of 8,000 yuan/ton.