On July 2, the rare earth index was 397 points, unchanged from yesterday, down 60.30% from the cyclical peak of 1000 points (2011-12-06), and up 46.49% from the lowest point of 271 on September 13, 2015. (Note: Period refers to 2011-12-01 to date).

The average price of Neodymium in rare earth metals is 445,000 yuan/ton, dysprosium metal is 2.4 million yuan/ton and praseodymium metal is 710,000 yuan/ton. The average price of praseodymium and neodymium oxide in rare earth oxides is 345,000 yuan/ton; dysprosium oxide is 1.965 million yuan/ton; praseodymium oxide is 4.05 million yuan/ton; and neodymium oxide is 347,000 yuan/ton. The price of praseodymium and neodymium alloys in rare earth alloys is 445,000 yuan per ton, and the average price of dysprosium and iron alloys is 1.965 million yuan per ton.

In the near future, the price trend of rare earth is temporarily stable, the domestic rare earth market is generally trading, and the price trend of most commodities in the rare earth market is stable. However, in the near future, the prices of some products in the market have risen and fallen, the prices of dysprosium and terbium metals have fallen and the prices of neodymium series products have shocked in the near future, the supply in the market is normal, and the price of light rare earth has recently moved. The situation is temporarily stable. The price fluctuation of rare earth market is related to environmental protection supervision in the whole country. Rare earth production has its particularity, especially the radiation hazard of some products, which makes environmental protection supervision stricter. Under the strict environmental protection inspection, rare earth separation enterprises in many provinces have stopped production, resulting in a general market of rare earth oxides. Recently, the rare earth market has turned to the seller’s market. The manufacturers have reasonable control over sales and are reluctant to sell. Especially for some mainstream rare earth oxides, the supply performance is still tense. The price trend of rare earth market has slightly declined. Recently, large enterprise groups are reluctant to sell, and the market of rare earth has improved. However, the major manufacturers are cautious about the pricing of products.

Recently, the State Environmental Protection Department has made no reduction in its stringent efforts, which has a greater impact on the rare earth industry. The rare earth industry has a low start-up and a cold market. At the recent press conference on macroeconomic operation held by the Development and Reform Commission, Meng Wei, spokesman of the National Development and Reform Commission (NDRC), answering reporters’questions on rare earth, said that on the basis of in-depth investigation and scientific demonstration, relevant policies and measures would be put forward to give full play to the special value of rare earth as a strategic resource. Due to the increasingly obvious regulatory effect, the supply of raw ore resources in the upstream of the rare earth industry has shrunk, and the trading market of the rare earth industry is general.

Rare earth analysts from business associations expect that the recent stringent domestic environmental protection efforts will not decrease, coupled with the domestic reorganization of the order of the rare earth industry, Myanmar restricts exports and reduces supply, but the recent rare earth market transactions are limited, and rare earth products are expected to remain volatile.

On July 1, the rare earth index was 397 points, unchanged from yesterday, down 60.30% from the cyclical peak of 1000 points (2011-12-06), and up 46.49% from the lowest point of 271 on September 13, 2015. (Note: Period refers to 2011-12-01 to date).

The average price of Neodymium in rare earth metals is 445,000 yuan/ton, dysprosium metal is 2.4 million yuan/ton and praseodymium metal is 710,000 yuan/ton. The average price of praseodymium and neodymium oxide in rare earth oxides is 345,000 yuan/ton; dysprosium oxide is 1.965 million yuan/ton; praseodymium oxide is 4.05 million yuan/ton; and neodymium oxide is 347,000 yuan/ton. The price of praseodymium and neodymium alloys in rare earth alloys is 445,000 yuan per ton, and the average price of dysprosium and iron alloys is 1.965 million yuan per ton.

In the near future, the price trend of rare earth is temporarily stable, the domestic rare earth market is generally trading, and the price trend of most commodities in the rare earth market is stable. However, in the near future, the prices of some products in the market have risen and fallen, the prices of dysprosium and terbium metals have fallen and the prices of neodymium series products have shocked in the near future, the supply in the market is normal, and the price of light rare earth has recently moved. The situation is temporarily stable. The price fluctuation of rare earth market is related to environmental protection supervision in the whole country. Rare earth production has its particularity, especially the radiation hazard of some products, which makes environmental protection supervision stricter. Under the strict environmental protection inspection, rare earth separation enterprises in many provinces have stopped production, resulting in a general market of rare earth oxides. Recently, the rare earth market has turned to the seller’s market. The manufacturers have reasonable control over sales and are reluctant to sell. Especially for some mainstream rare earth oxides, the supply performance is still tense. The price trend of rare earth market has slightly declined. Recently, large enterprise groups are reluctant to sell, and the market of rare earth has improved. However, the major manufacturers are cautious about the pricing of products.

Recently, the State Environmental Protection Department has made no reduction in its stringent efforts, which has a greater impact on the rare earth industry. The rare earth industry has a low start-up and a cold market. At the recent press conference on macroeconomic operation held by the Development and Reform Commission, Meng Wei, spokesman of the National Development and Reform Commission (NDRC), answering reporters’questions on rare earth, said that on the basis of in-depth investigation and scientific demonstration, relevant policies and measures would be put forward to give full play to the special value of rare earth as a strategic resource. Due to the increasingly obvious regulatory effect, the supply of raw ore resources in the upstream of the rare earth industry has shrunk, and the trading market of the rare earth industry is general.

Rare earth analysts from business associations expect that the recent stringent domestic environmental protection efforts will not decrease, coupled with the domestic reorganization of the order of the rare earth industry, Myanmar restricts exports and reduces supply, but the recent rare earth market transactions are limited, and rare earth products are expected to remain volatile.

Price Trend

In June 2019, the domestic market for cyclohexanone was weak. According to the sample data monitored by business associations, the price of cyclohexanone was 8600 yuan/ton at the beginning of the month, 7966 yuan/ton at the end of the month, a drop of 7.36% in the month. Prices fell 33.61% over the same period last year.

II. Market Analysis

Product: Cyclohexanone market price fluctuated little in June. At the end of May, the market of cyclohexanone rose sharply. Due to the lack of support from the chemical fiber market, in June, China Silver Cyclohexanone plant was restarted and the demand for chemical fibers was general. The market of cyclohexanone began to decline. In mid-January, the pure benzene market was stable and upward, and the cost side was well supported. In addition, there were rumors that Shenyuan, Lubao and Zhejiang products were purchased in the market. The pressure of cyclohexanone factory shipment was temporarily eased. The factory tried to increase, and traders followed. A week later, due to the weak operation of the caprolactam market, the caprolactam plant with a gap in cyclohexanone did not plan to increase its load, and even some factories reduced their load. The demand for downstream caprolactam decreased again, and the market for cyclohexanone fell again. In late January, the listing of upstream pure benzene continued to rise, the trade war seemed to ease, downstream polymerization plants and caprolactam boosted, Honda briefly stopped and restarted, Haili reduced its load, the overall spot supply decreased, cyclohexanone temporarily stabilized, and some of the existing factories tried to increase. The main stream of the factory is 7800-7900 yuan/ton.

Industry Chain: Raw Material: Pure Benzene: In the month, the price of pure Benzene rose sharply, especially in the United States. Due to heavy rains and floods at the beginning of the month, the production load of local factories is limited, the main insurance contract and the reduction of spot release lead to the reduction of supply. In addition, due to damage to the wharf, shipping congestion caused delays in the delivery of some pure benzene, resulting in a sharp rise in prices due to market shortage. Due to the soaring of pure benzene in the United States, the arbitrage window between the United States and South Korea was opened, and pure benzene in Asia followed. Sinopec’s pure benzene rose 350 yuan/ton to 4850 yuan/ton four times in a month to follow up the market. In addition, the inventory of East China Port continued to decline due to the high external market and the reduction of ship arrivals, which is good support for the price. Domestic stockholders actively speculated, and East China’s offer once rose to 5000 yuan/ton. But pure benzene is rapidly rising.

Industry: According to the price monitoring of business associations, in June 2019, there were 34 commodities rising annually in the chemical sector, of which 11 commodities increased by more than 5%, accounting for 13.1% of the monitored commodities in the sector; the top three commodities were epichlorohydrin (20.33%), hydrochloric acid (20.00%) and calcium carbide (11.04%). There are 43 kinds of commodities with a decline of more than 5%, accounting for 19% of the monitored commodities in this sector. The products with the first three declines are hydrogen peroxide (-21.81%), silicone DMC (-17.38%) and butanone (-13.71%). This month’s average rise and fall was -0.38%.

3. Future Market Forecast

Recent restart of Hongda cyclohexanone plant, load reduction of Shandong Haili cyclohexanone, Luxi spot export volume is not much, short-term spot export volume of cyclohexanone has little change. In addition, Huafeng may put into operation 200,000 tons of cyclohexanone plant in July, Weiming Petrochemical Company plans to put into operation 150,000 tons, and Hengyi Cyclohexanone also has a new production plan. In a short period of time, the spot of cyclohexanone fluctuates little, and there is a possibility that the supply of cyclohexanone will increase dramatically in the middle and late July. At present, some factories have instability in start-up, and the pressure of spot stock is not high. The end market demand lacks substantial good news. The caprolactam plant with cyclohexanone gap has not yet been raised, but the chemical fiber market is likely to rise. Cyclohexanone analysts at business associations expect. In the short term, the market of cyclohexanone is dominated by horizontal consolidation. If the new capacity of cyclohexanone is released smoothly in mid-late July, the supply will exceed the demand.

Price Trend

According to the data of business associations, the price trend of domestic TDI market has been running smoothly this week. The average market price in eastern China is about 12 900 yuan/ton in the week, down 57.43% from the same period last year.

II. Market Analysis

Products: This week, the TDI market in eastern China is weak, the price trend is stable, the business offer is temporarily stable, the overall atmosphere in the venue continues to be weak, and the actual single transaction is less. As of the 28th, China’s domestic goods with tickets out of warehouse offer reference 12700-12800 yuan/ton, Shanghai goods with tickets out of warehouse offer reference 12800-13000 yuan/ton; South China’s domestic goods with tickets out of warehouse offer reference 12800 yuan/ton, Shanghai goods with tickets out of warehouse offer reference 12900-13000 yuan/ton; North China’s domestic goods with tickets out of warehouse offer reference 12600-12800 yuan/ton, Shanghai goods with tickets out of warehouse offer reference 12600-12800 yuan/ton. Reference 12800-13000 yuan/ton.

Industry chain: This week, the price trend of nitric acid in the upstream of domestic TDI is stable, and the market price is around 1800 yuan/ton in the week. The supply of nitric acid is not large, the quotation of manufacturers is stable, and the nitric acid goods are in good condition. This week domestic toluene price fluctuation upward, early in the week the average price of enterprises is 5087.50 yuan/ton, Friday the average price of enterprises is 5150.00 yuan/ton, a weekly increase of 1.28%. Rising raw material prices in the upstream have a negative impact on downstream TDI.

3. Future Market Forecast

According to the data analyst of business associations, at present, the domestic TDI market has been consolidated and operated. The overall atmosphere in the market is still light, the actual single transaction is scarce, the business mentality is slightly different, and the high and low offers have been heard. It is expected that the TDI market will be sorted out in the later period.

On June 26, the rare earth index was 401 points, down 1 point from yesterday, down 59.90% from the cyclical peak of 1000 points (2011-12-06), and up 47.97% from the lowest point of 271 on September 13, 2015. (Note: Period refers to 2011-12-01 to date).

The average price of Neodymium in rare earth metals dropped by 125,000 yuan to 445,000 yuan per ton; the average price of dysprosium was 2.4 million yuan per ton; and the average price of praseodymium was 710,000 yuan per ton. The average price of praseodymium and neodymium oxides in rare earth oxides dropped by 10,000 yuan/ton to 345,000 yuan/ton, dysprosium oxide price was 1.965 million yuan/ton, praseodymium oxide price was 4.05 million yuan/ton, and neodymium oxide price dropped by 10,000 yuan/ton to 347,000 yuan/ton. The price of praseodymium and neodymium alloys in rare earth alloys dropped by 12.5 million yuan per ton to 445,000 yuan per ton, while the average price of dysprosium-iron alloys was 1.965 million yuan per ton.

Recently, some prices in the rare earth market have fallen, the domestic rare earth market is in general, and most commodity prices in the rare earth market are stable. However, the prices of some products in the rare earth market have fallen sharply and the prices of terbium-based metals have fallen sharply. Recently, the prices of Praseodymium-Neodymium series products have fallen back, the supply in the market is normal, and the prices of light rare earths have declined recently. The price fluctuation of rare earth market is related to environmental protection supervision in the whole country. Rare earth production has its particularity, especially the radiation hazard of some products, which makes environmental protection supervision stricter. Under the strict environmental protection inspection, rare earth separation enterprises in many provinces have stopped production, resulting in a general market of rare earth oxides. Recently, the rare earth market has turned to the seller’s market. The manufacturers have reasonable control over sales and are reluctant to sell. Especially for some mainstream rare earth oxides, the supply performance is still tense. The price trend of rare earth market has slightly declined. Recently, large enterprise groups are reluctant to sell, and the market of rare earth has improved. However, the major manufacturers are cautious about the pricing of products.

Recently, the State Environmental Protection Department has made no reduction in its stringent efforts, which has a greater impact on the rare earth industry. The rare earth industry has a low start-up and a cold market. Recently, the NDRC held a press conference on macroeconomic operation. Meng Wei, a spokesman for the NDRC, answered reporters’questions on rare earth. He said that on the basis of in-depth investigation and scientific demonstration, relevant policies and measures would be put forward to give full play to the special value of rare earth as a strategic resource. Due to the increasingly obvious regulatory effect, the rare earth industry upstream. The supply of raw mineral resources has shrunk, and the rare earth industry has a general trading market.

Rare earth analysts from business associations expect that the recent domestic environmental stringency will not decrease, coupled with the domestic reorganization of the order of the rare earth industry, Myanmar’s export restrictions and supply reduction, but the recent rare earth market transactions are limited, and rare earth products are expected to decline slightly.

On June 26, the rare earth index was 401 points, down 1 point from yesterday, down 59.90% from the cyclical peak of 1000 points (2011-12-06), and up 47.97% from the lowest point of 271 on September 13, 2015. (Note: Period refers to 2011-12-01 to date).

The average price of Neodymium in rare earth metals is 4.575 million yuan per ton, dysprosium metal is 2.4 million yuan per ton and praseodymium metal is 71 million yuan per ton. The average price of praseodymium and neodymium oxide in rare earth oxides is 355,000 yuan/ton; the price of dysprosium oxide has dropped 35,000 yuan/ton to 19.65 million yuan/ton; the average price of praseodymium oxide is 405,000 yuan/ton; and the average price of neodymium oxide is 357,000 yuan/ton. The price of praseodymium and neodymium alloys in rare earth alloys was 457,500 yuan per ton, while the average price of dysprosium-iron alloys dropped 35,000 yuan per ton to 19,650,000 yuan per ton.

Recently, some prices in the rare earth market have fallen, the domestic rare earth market is in general, and most commodity prices in the rare earth market are stable. However, the prices of some products in the rare earth market have fallen sharply and the prices of terbium-based metals have fallen sharply. Recently, the prices of Praseodymium-Neodymium series products have fallen back, the supply in the market is normal, and the prices of light rare earths have declined recently. The price fluctuation of rare earth market is related to environmental protection supervision in the whole country. Rare earth production has its particularity, especially the radiation hazard of some products, which makes environmental protection supervision stricter. Under the strict environmental protection inspection, rare earth separation enterprises in many provinces have stopped production, resulting in a general market of rare earth oxides. Recently, the rare earth market has turned to the seller’s market. The manufacturers have reasonable control over sales and are reluctant to sell. Especially for some mainstream rare earth oxides, the supply performance is still tense. The price trend of rare earth market has slightly declined. Recently, large enterprise groups are reluctant to sell, and the market of rare earth has improved. However, the major manufacturers are cautious about the pricing of products.

Recently, the State Environmental Protection Department has made no reduction in its stringent efforts, which has a greater impact on the rare earth industry. The rare earth industry has a low start-up and a cold market. Recently, the NDRC held a press conference on macroeconomic operation. Meng Wei, a spokesman for the NDRC, answered reporters’questions on rare earth. He said that on the basis of in-depth investigation and scientific demonstration, relevant policies and measures would be put forward to give full play to the special value of rare earth as a strategic resource. Due to the increasingly obvious regulatory effect, the rare earth industry upstream. The supply of raw ore resources has shrunk, and the trading market of rare earth industry is normal.

Rare earth analysts of business associations expect that the recent stringent domestic environmental protection efforts will not decrease, coupled with the domestic reorganization of the order of the rare earth industry, Myanmar’s restrictions on exports and reduced supply, which will provide some favorable support for the rare earth industry, but the recent rare earth market transactions are limited, and rare earth products are expected to remain volatile.

Price Trend

According to the data of business associations, the PA66 market continued its weak and stable trend in the middle and late June, and the imbalance between supply and demand remained unchanged. As of June 25, the average price of PA66 mainstream offer is about 27250.00 yuan/ton.

Analysis of influencing factors:

Products: In the second half of June, the domestic market of adipic acid in the upstream of PA66 is tidying up and running. Inventory pressure is generally heavy on the market. Demand is weak and there is room for negotiation. Trading is weak and merchants deliver at low prices. Pure benzene has recently been well supported by downstream styrene interest, and since early June 17, various pure benzene enterprises have raised prices one after another. Towards the weekend, the pure benzene market mentality has fallen, but the factory is still dominated by a strong price mentality, low-price supply is difficult to find; the upstream support of PA66 is limited, and the domestic brand PA66 offers are stable and weak. At present, it is reported that the National Development and Reform Commission has listed the production line of adiponitrile of 50,000 tons/year or more as a key project, and encouraged the development of production technology of adiponitrile with independent intellectual property rights to break through the technical blockade. The long-term expectation is that the price centre of gravity may decline.

Demand: At present, domestic PA66 chip supply and demand imbalance, downstream factories continued to weaken. Manufacturers are under pressure from the cost side to start construction on the low side. Market buy gas is insufficient, the industry is more hollow, traders follow the market, trading resistance is greater.

Future forecast:

Business analysts believe that the domestic PA66 market continued to operate weakly in the second half of June. The upstream support is not good, the downstream maintains just in need of procurement, the contradiction between supply and demand persists, and the offer declines narrowly. It is anticipated that PA66 may be vulnerable and difficult to change in the near future.

On June 23, the rare earth index was 407 points, unchanged from yesterday, down 59.30% from the cyclical peak of 1000 points (2011-12-06), and up 50.18% from the lowest point of 271 on September 13, 2015. (Note: Period refers to 2011-12-01 to date).

The average price of Neodymium in rare earth metals is 470,000 yuan/ton, dysprosium metal is 2.4 million yuan/ton and praseodymium metal is 710,000 yuan/ton. The average price of praseodymium and neodymium oxide in rare earth oxides is 3.675 million yuan/ton; dysprosium oxide is 2 million yuan/ton; praseodymium oxide is 4.05 million yuan/ton; and neodymium oxide is 3.695 million yuan/ton. The price of praseodymium and neodymium alloys in rare earth alloys is 470,000 yuan per ton, and the average price of dysprosium and iron alloys is 2,000,000 yuan per ton.

Recently, the price trend of rare earth on the market is temporarily stable, the domestic rare earth market is generally trading, the price trend of most commodities in the rare earth market is stable, and the import of heavy rare earth dysprosium and terbium varieties is limited by Myanmar’s mines. Market participants are more optimistic about the price of medium and heavy rare earth. Holders are reluctant to sell, terbium metals are rising and falling. Recently, the market trend of praseodymium and neodymium series products has been reversed, and the supply on the market is normal. Light rare earth prices have been declining recently. The price fluctuation of rare earth market is related to environmental protection supervision in the whole country. Rare earth production has its particularity, especially the radiation hazard of some products, which makes environmental protection supervision stricter. Under the strict environmental protection inspection, rare earth separation enterprises in many provinces have stopped production, resulting in a general market of rare earth oxides. Recently, the rare earth market has turned to the seller’s market. The manufacturers have reasonable control over sales and are reluctant to sell. Especially for some mainstream rare earth oxides, the supply performance is still tense. The price trend of rare earth market has slightly declined. Recently, large enterprise groups are reluctant to sell, and the market of rare earth has improved. However, the major manufacturers are cautious about the pricing of products.

Recently, the State Environmental Protection Department has made no reduction in its stringent efforts, which has a greater impact on the rare earth industry. The rare earth industry has a low start-up and a cold market. Recently, the NDRC held a press conference on macroeconomic operation. Meng Wei, a spokesman for the NDRC, answered reporters’questions on rare earth. He said that on the basis of in-depth investigation and scientific demonstration, relevant policies and measures would be put forward to give full play to the special value of rare earth as a strategic resource. Due to the increasingly obvious regulatory effect, the rare earth industry upstream. The supply of raw ore resources has shrunk, and the trading market of rare earth industry is normal.

Rare earth analysts of business associations expect that the recent stringent domestic environmental protection efforts will not decrease, coupled with the domestic reorganization of the order of the rare earth industry, Myanmar’s restrictions on exports and reduced supply, which will provide some favorable support for the rare earth industry, but the recent rare earth market transactions are limited, and rare earth products are expected to remain volatile.

Price trends:

According to statistics, this week’s domestic ex-factory price of p-xylene is stable, with an average weekend price of 7,300 yuan/ton, which is stable compared with the price of 7,300 yuan/ton at the beginning of the week, down 6.41% from the same period last year.

II. Market analysis:

Products: This week, the domestic market price trend of p-xylene is stable, the domestic PX start-up rate maintains more than 70%, Huizhou refining and chemical plant runs steadily, Fuhaichuang plant starts a line, Pengzhou Petrochemical plant runs steadily, Yangtze Petrochemical PX plant runs normally, Jinling Petrochemical plant runs smoothly, Qingdao Lidong plant runs at full load, Qi Luzhou Petrochemical Plant runs steadily, Urumqi Petrochemical Plant starts about 50%, Hengli Petrochemical Plant runs normally, domestic p-xylene supply is normal, recent international crude oil price declines, domestic p-xylene market price trend is temporarily stable. The opening rate of paraxylene plant in Asia is more than 70% this week. The supply of PX in Asia is normal. The price of PX external market fluctuates this week. By the end of the week, the closing price of paraxylene in Asia rose by 7 US dollars/ton. The closing price is 795-797 US dollars/ton FOB in Korea and 814-816 US dollars/ton CFR in China. Over 50% of domestic products need it. To import, the closing price of PX external market remains low, while the price trend of domestic PX market is temporarily stable.

Industry Chain: Domestic crude oil price closed higher this week. As of 20 days, the US WTI crude oil futures market price in July was 56.65 US dollars/barrel, Brent crude oil futures price in August was 64.45 US dollars/barrel. The price of crude oil closed higher, which has a certain cost support role for downstream petrochemical products. The price trend of PX market is temporarily stable. This week, PTA market prices in the downstream rose by 6.25% this week. By the end of the weekend, East China PTA market talks were around 5900-6000 yuan. Prices in the upstream raw material PX market were stable. This week, PTA plant start-up rate maintained about 90%, downstream polyester plant start-up rate was about 88%, and textile start-up rate in Jiangsu and Zhejiang regions maintained about 78%. The downstream PTA and polyester products start-up rate maintained high, PTA price rise has a certain positive effect on the market price of p-xylene, and the market price trend of p-xylene is temporarily stable.

Industry: This week’s textile industry market trend shocks, textile industry start-up rate remains high, crude oil prices remain shocks, raw material PX market trend is stable.

3. Future market forecast:

Chen Ling, an analyst with business association PX, believes that the recent rise in crude oil prices, coupled with the sharp rise in PTA market prices, has little change in downstream textile industry startup rate and normal supply of domestic PX market. It is expected that the price of PX market will rise slightly next week.

I. Global New Capacity

By the end of 2017, the global polypropylene production capacity, including the mainland of China, will be 83.5 million tons. In 2018, the global new production capacity will be about 2.81 million tons. By the end of this year, the global polypropylene production capacity will be about 86.31 million tons, an increase of 3.4%. In 2019, the global production capacity of polypropylene increased by 8.53 million tons, and by the end of 2019, the global production capacity of polypropylene reached 94.84 million tons, an increase of 9.9%.

II. China’s New Capacity

At present, 27 petrochemical plants have been planned to put into operation, with an estimated additional capacity of 11.5 million tons. The next three years will be the blowout period of polypropylene production capacity.

III. Oil prices

1. Trend of WTI and Brent Oil

(1) The demand for refined oil in the United States is lower than that in the same period last year. In the four weeks ending May 31, 2019, the total demand for refined oil in the United States averaged 11,000 barrels a day, 0.6% lower than the same period last year. Vehicle gasoline demand averaged 9.353 million barrels in four days, 1.3% lower than the same period last year. Distillate oil demand averaged 3.888 million barrels in four days, 0.8% lower than the same period last year. The average four-day demand for kerosene-based aviation fuel is 2.0% higher than that of the same period last year.

(2) The operating rate of U.S. refineries has increased, crude oil imports have increased sharply, U.S. crude oil stocks have increased to their highest level since July 2017, and gasoline and distillate stocks have also increased.

(3) U.S. crude oil exports have increased substantially. As of May 31, 2019, U.S. crude oil exports averaged 3.298 million barrels a day, down 19,000 barrels a day from the previous week and up 1.584 million barrels a day from the same period last year.

Overall, supply exceeds demand, and crude oil trend is predicted to oscillate downward from July to August.

2. Propylene Price Trend

Propylene prices have fallen in the past six months. From February 2019 onwards, it shook between 6750 and 7300. PP start-up rate rebounded somewhat in April-June, but the overall level is still low, and petrochemical stocks maintain a reasonable level, supply-side pressure is not large; demand is about to enter the lowest season, the current market turnover is cool, but demand has fallen to a low point, and after the price plunge, the attractiveness of the middle and lower reaches has gradually increased, PP continues to fall in limited space. Overall, PP is empty. The recent sharp drop in oil prices has accelerated the decline of PP. Short-term decline is still dominant, but the space below 8000 is not big. It is expected that the decline will gradually stop to bottom in the later period.

IV. Import and Export Quantity of Polypropylene in 2019

From 2017 to 2018, the demand for new materials increased due to the national ban on waste plastics, which also contributed to the increase of imports to a certain extent. In recent years, domestic imports have gradually become polarized, mainly low-end products with price advantages and high-end special materials with competitive advantages. At present, domestic petrochemical enterprises are increasing research and development of high-end special materials to reduce domestic import dependence. It is estimated that high-end imports will not decline in recent years.

Petrochemical Inventory

Affected by the Dragon Boat Festival holidays, Petrochemical polyolefin stocks broke through the 900,000 mark again, with 920,000 tons on Monday, an increase of 90,000 tons over the same period last week and 160,000 tons over the same period last year. The downstream demand continues to be weak. In recent years, the domestic new overhaul is on the low side, the start-up rate has increased slightly, and the depot of petrochemical industry has slowed down. However, in July-August, there are still a lot of equipment maintenance in China, which is conducive to inventory digestion. Later, the focus is on the digestion of petrochemical inventory.

6. Start-up rate of polypropylene in China

From 2016 to 2018, the new polypropylene plant grew moderately, and the growth rate of production gradually decreased. The start-up rate of polypropylene industry stabilized at about 90%, and the start-up rate reached 93.26% in the whole year of 2018.

Since mid-late May 2019, the number of new PP overhaul devices has decreased, the number of restart devices has increased, and the overhaul intensity has weakened. The starting rate of PP has rebounded to over 85%. Recently, the starting rate of PP has decreased slightly in Xuzhou Haitian and Lianhong Group, and it is still near 85%. Although the supply pressure is not high, the supply side profit has weakened.

VII. Downstream Demand Analysis

The figure below shows the proportion of PP consumption in recent years. Wire drawing accounted for 36.43% and copolymer injection moulding accounted for 20.43%. Secondly, fiber and homopolymer injection moulding were 11.47% and 11.37% respectively.

(1) Wire drawing is mainly used in plastic products. The daily container bags, woven bags, food bags and transparent bags belong to PP wire drawing products. Since the implementation of the domestic environmental protection policy in 2017, the demand for cement and building materials packaging has been declining, and the plastic knitting industry has been greatly impacted. The output growth of bulk products is limited, such as: China’s total grain output is 1235.8 billion kg, 0.3% higher than the previous year; the output of synthetic resin is 83.78 million tons, an increase of 4.5% over the previous year; the output of chemical fertilizer is 6.65 million tons, a decrease of 26% over the previous year; and the output of cement is 2.316 billion tons, a decrease of 0.2% over the previous year.

(2) PP injection plastics are mainly used in small household appliances, toys, washing machines, automotive parts and so on. Among them, automobile sales fell 2.8%, hippocampus automobile sells houses to save themselves, Beijing Hyundai shuts down factories, Shenlong automobile layoffs 2,000 people, downstream dealers profit loss increased from 11.4% to 39.3%.

As for household appliances, it is difficult for the household appliances industry, such as color TV, refrigerator and washing machine, to catch up with the economic growth because of the tightening policy of real estate. With the intensification of competition, the decline of household appliances sales conforms to the current market logic. In 2018, the household appliances market reached 810.4 billion yuan, an increase of 1.9% year on year, but the growth rate dropped sharply.

(3) PP fibers. Mainly used in decoration, clothing and other fields, since the implementation of the second-child policy in 2011, downstream wet towels, diapers and other maternal and infant supplies have increased sharply, and domestic fiber materials are in short supply. According to statistics, the global demand for fibers will continue to grow substantially, and the composite annual growth rate is expected to be 2.6% from 2017 to 2025. Therefore, the downstream demand for PP fibers will increase in the later period.

Overall, downstream demand growth is not significant, and there is a downward trend. Under the influence of large-scale products, automobiles and household appliances, it is estimated that the downstream demand will not increase in 2019.

VIII. Profit Analysis of Polypropylene

1) In May, the gross profit of oil-based PP production enterprises was significantly lower than that of last month, with an average gross profit of 487 yuan/ton, a decrease of 46.37% annually compared with that of last month. Major trade frictions between China and the United States have intensified to curb oil prices, which have declined narrowly this month.

(2) The average profit of coal-based PP in May was 737 yuan/ton, down 31.51% from last month. The main reason is that the cost of coal is 0.71% higher than that of last month, but the price of coal-based PP is obviously falling, which is 3.35% lower than that of last month. The price of coal-based PP is falling, but the cost of coal is rising, so the profit margin is reduced.

(3) The average profit of methanol-to-polypropylene production in May is 324 yuan/ton. With the heat of the weather, the downstream demand of traditional terminals is difficult to boost.

The average profit level of PDH in May was 1653 yuan/ton, up 19.44% from last month. The average price of imported propane this month was US$497 per ton, down 73 US$per ton from the average price last month, resulting in a 7.78% drop in costs.

In May, the profit of PP from propylene production increased slightly. The average profit level in the month was 503 yuan/ton, down 380 yuan/ton from the previous month, an increase of 43.04%. The average price of propylene this month was 7004 yuan/ton, which was down from last month by 0.20%. The decline in propylene resulted in a simultaneous decrease in cost by about 0.16%.

9. Balance of supply and demand for Polypropylene

Supply and demand are shrinking from 2014 to 2018, but a large number of petrochemical plants will be put into operation in the second half of 2019, releasing about 2.75 million tons of capacity. In the current automobile market is sluggish, household appliances market with the tightening of the property market, downstream demand is difficult to boost.

X. Recent International Environment

1. The U.S. crude oil embargo on Iran will widen the global crude oil gap and support the price of polypropylene in the later period of international crude oil.

2. The United States continues to impose tariffs on China, and imports of plastic products from the United States will decline. The resulting supply gap should be filled by the domestic market, which invisibly increases domestic demand and supports the price of polypropylene.

XI. SUMMARY

Combined with the above factors, it is difficult to judge that PP price in the post-market will rise in the short term.