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In the first quarter of 2022, the polypropylene market showed an irregular "W" trend, with an average price of 8637 yuan / ton, a month on month decrease of 0.12% and a year-on-year decrease of 1.83%; The highest point in the quarter is 9600 yuan / ton, and the lowest point in the quarter is 8150 yuan / ton.
The main reasons for the market trend in the first quarter are:
1) Cost side support, the situation of global energy supply shortage and the war between Russia and Ukraine have become the main factors driving the rise of international oil prices, propane and a series of raw material prices.
2) Supply side pressing. In terms of capacity expansion, 1.3 million tons of PP were intensively expanded in the first quarter, and three sets of 1.2 million tons / year polypropylene units were concentrated in East China, and the supply end rose rapidly. In terms of inventory, the phenomenon of high inventory in the industrial chain remained high after the Spring Festival, and the inventory of two barrels of oil depot increased by 7.61% year-on-year after the Spring Festival.
3) Demand side drag. Due to the Spring Festival holiday in the first quarter and the prominent downward pressure on the domestic economy, the shortage of new downstream orders such as plastic knitting and injection molding was restricted. In the first quarter, the operating rate of plastic knitting decreased by 0.28% year-on-year, and the operating rate of injection molding products decreased by 7.21% year-on-year. The market will face the pressure of weak terminal demand in the short term.
In the first quarter of 2022, the profit of coal to polypropylene was the best. Although it showed a loss value, it was the best profit among the five different raw material categories, reaching negative 117.17 yuan / ton. The profit of coal to polypropylene increased the most month on month, reaching 94.70%.
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Since 2022, recycled PP has been subject to less new orders from downstream product enterprises and greater shipping pressure. The price continues to be at the low level in 2021, i.e. 6650 yuan / ton. Even after the return of the Spring Festival, the downstream demand follow-up is slow, the production enthusiasm of enterprises is not high, and the initiative offer intention is low, most of them still continue the pre Festival price.
However, after March, driven by the gradual recovery of downstream operating rate and the continuous widening of the price difference between old and new materials, the offer entered the rising channel.
According to the valuation data of Zhuo Chuang information, the price of white transparent primary particles in recycled PP Shandong market closed at 7000 yuan / ton at the end of the first quarter, with an overall increase of 350 yuan / ton, or 4.48%. The price of white PPR crushed material in Jiangsu market closed at 6050 yuan / ton at the end of the first quarter, up 500 yuan / ton, up 9.01%.
In April, the order follow-up of the downstream industry of recycled polypropylene was insufficient, coupled with the poor transportation in some regions, and the real offer was promoted slowly. In terms of upstream crushed materials, although the supply of crushed materials is tight, granular enterprises have pressed down the price and limited the collection, so as to suppress the rise of cost. The price of crushed materials has little change this month. Therefore, the profit of recycled PP industry in April is still in a relatively reasonable range.
In April, the profit margin of white transparent primary particles increased compared with that in March. As of the end of the month, the average profit of this month was 347 yuan / ton, an increase of 53 yuan / ton compared with the previous month. Despite the tight supply of upstream crushed materials this month, the enterprise offer is relatively firm.
However, it is difficult for the particle factory to ship, so it is prudent to purchase broken materials at a low price, the upstream cost can be controlled, and the enterprise profit returns to a moderate level. It is worth noting that the demand side is weak this month, the trading volume of enterprises is limited, and various additional costs are high. The overall profitability of recycled PP enterprises is poor.
4) Logistics transportation is hindered. The sudden epidemic situation in Shanghai, Suzhou, Jilin and other places has led to the blockade of the whole city, and the local logistics transportation links are interrupted, which seriously hinders the inventory transmission of the industrial chain.