In recent years, China’s polypropylene production capacity has expanded rapidly, and the industry has developed rapidly. The worldwide public health events in 2021 are still affecting people’s production and life on a large scale, but domestic polypropylene enterprises and employees forge ahead, stabilize supply and ensure construction, and the production supply of various models is relatively abundant throughout the year; All new production lines are tested step by step to produce materials, which contributes to the backbone of the domestic polypropylene market. The continuous practice of accurate domestic epidemic prevention policies has enabled the market to return to the supply and demand market as soon as possible. The growing demand of terminal industry is the main driving force for the rapid growth of domestic polypropylene industry. According to the monitoring of business society, the domestic polypropylene market in 2021 is generally stable. As of December 21, the mainstream offer price of T30S (wire drawing) by domestic manufacturers and traders is about 8150.00 yuan / ton, the price of most brand products has dropped to the price level at the beginning of the year, the output and consumption have increased, and the supply and demand are booming.

Cause analysis

It is hard to say that the opening market of 2021 is positive for polypropylene. The upstream propylene undertakes the declining market last year, the manufacturer’s inventory pressure is too high, and the shipment situation is cold. At the same time, logistics has also been greatly affected, which has a negative impact on PP market. In February, the inventory accumulation of PetroChina and PetroChina began gradually before the inventory Festival. The inventory position of plastic weaving and BOPP plants was relatively high. The stagflation adjustment in injection molding and wire drawing was also highly related to short-term oversupply. By the middle and late February, although the units of Donghua energy Ningbo phase II project began to be put into operation and the social inventory was high, the original PP price was weak in the strong country. The superimposed cold disaster in the United States caused a reduction in crude oil production and a rise in the price of remote raw oil. At the same time, many chemical enterprises in the disaster stricken areas of the United States stopped production, and the devices were frequently overhauled. Similarly, affected by the earthquake in Japan, the plant was also shut down on a large scale. The industry is worried about the insufficient supply of chemicals, has strengthened its mentality towards the price of bulk commodities, and the global PP generally rose sharply. Domestically, affected by the local spring festival advocacy, the downstream has resumed work rapidly this year, the accumulated demand has increased in advance, the market has warmed up rapidly, and the supply in Northeast China has even been tight to a certain extent. In March, the price of PP was at a high level, affecting the purchase of downstream factories, and the spot price stagnated and fell. In the first quarter, the domestic epidemic prevention situation was stable and good, and PP fiber material and PP melt blown material, one of the important epidemic prevention materials, also fell after rising. Fortunately, the demand at home and abroad is still stable, but there are varying degrees of excess suppliers in the fiber material and melt blown material manufacturing market, and the enterprise profits begin to shrink. ExxonMobil, jumeilai and other high melting fiber products of major international manufacturers have been reduced one after another.

In the second quarter, with the end of the rise in the upstream propylene price in late April, the price fell sharply, PP was also unstable, and the spot price fluctuated widely. In the first quarter, the overall average operating rate of domestic polypropylene plants was about 93%, which was at a historical high. The competition in the industry was strengthened, the profits of some PP polymerization enterprises were upside down in the second quarter, and there was a certain degree of contradiction between supply and demand in the PP market. It is worth mentioning that in the second quarter, China’s overseas export orders increased commendably, but the impact on the market was less than expected. The increase of trading resistance was one of the main reasons for the market in the second quarter. By June, the decline of upstream propylene stopped and the support of PP cost side rebounded. The traditional off-season demand affects the decline of demand, and the power restriction policy in some regions affects the industrial load, but the overall supply situation is relatively stable. At the end of the second quarter, the high international oil price supported the products related to the chemical industry chain, and the low inventory of petrochemical plants after going to the warehouse. These two advantages neutralized the negative effects, and the prices of polypropylene wire drawing and fiber products were strong. However, melt blown PP decreased significantly. At the end of June, the average quotation of domestic melt blown material pph-y1500 sample enterprises was about 9733.33 yuan / ton, falling below the 10000 yuan mark. The saturation of the domestic melt blown cloth manufacturing market has not improved for a long time, the departure of production enterprises has become prominent, and the number of units still shipping at the end of the year has decreased significantly. The overseas epidemic prevention market focuses more on the demand for oxygen generator and other equipment products, and the pulling effect on melt blown PP industry is not obvious. It is difficult to meet the demand for melt blown materials, and it is expected that the price market may continue to be weak.

Polypropylene products entered the market in the second half of the year, the overall shock was weak in the first and middle of the third quarter, and the spot price was adjusted in a narrow range. The load of downstream enterprises is not high, and the off-season characteristic of weak demand follow-up continues until the beginning of the traditional peak season “golden nine and silver ten” of PP industry. In the traditional peak season of 2021, the sharp rise of coal trend is indispensable. The PP market in September was mainly affected by the cost side benefit, of which the coal PP was the most obvious. During the period of plant restart and new capacity start-up, although the overall load of the industry was as high as 90%, the supply was high. However, the key “golden nine” demand driving force is limited. According to the survey of business analysts, the horizontal comparison of centralized replenishment intensity in PP market in September this year was weaker than that in previous years. During this period, the admission of environmental protection policies regulated the operating rate of upstream and downstream enterprises of PP, the feedback of downstream enterprises on high price sources was poor, and the shipment fluency of merchants was general, which formed resistance to the rise of spot price. In the third quarter, the rise of PP was mainly driven by the rise of propylene and coal on the cost side. After long-term adjustment, the price of PP fiber materials and melt blown materials, which rose due to worldwide health events, finally returned to rationality in 2021.

In October, the industry went up and down sharply. In terms of energy, the national development and Reform Commission strengthened the investigation and punishment of capital malicious speculation of coal, and the coal price stagnated and corrected. Coupled with the inflow of low-cost sources of propylene after the festival, the price began to callback further. There are many adjustment and reduction in the upstream, and the PP cost end support collapses. Local environmental protection policies continue to affect the industry and its downstream operating rate. The downstream demand is lower than that in the same period of previous years, dragging down the spot price of PP. Although the purchase follow-up of end users was not timely, the automobile and other industries just needed to be stable, raised a certain amount of demand, reduced the supply of low-cost goods in the field, and stabilized after the merchant reported the decline. The bottom building energy of downstream industries expresses the fall resistance property of PP. In terms of meltblown materials, the epidemic situation rebounded briefly in a small range in October and stabilized after rising. The supply pattern of meltblown materials in the field is still abundant, and the pulling effect of the spot market is seriously diluted. At present, the domestic polypropylene market is in a weak operation, repaired after the sharp fall of international oil price, and the propylene market is in sufficient supply to maintain a volatile downward trend. PP supply remained stable, and the on-site maintenance production line decreased. The downstream operating rate is still average, and businesses stabilized after falling.

Near the new year, some new production lines have landed around New Year’s day. 2022 and even 2023 are still the years of rapid development of China’s polypropylene industry. Domestic PP enterprises not only have made great progress in output, but also pay attention to the research and development of new products. New PP products for various purposes emerge one after another. If all recent projects start up and produce materials one after another, China’s PP production capacity will increase by about 8.7 million tons / year, and the total production capacity is expected to reach about 37.7 million tons / year. In the pattern of large-scale increase in supply, polypropylene prices can still return to the same period last year. In addition to the impact of global macro inflation, the development of terminal enterprises is an important new force supporting China’s PP industry chain.