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The spread among different PP varieties will be narrow down
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The spread among different PP varieties will be narrow down

Views: 0     Author: Site Editor     Publish Time: 2019-08-14      Origin: Site

2. Seeing low-MFR co PP alone, the production growth in 2019 is evidently higher than the previous years, and it also hits a record high in June 2019.



Above all, Chinese petrochemical and coal-chemical producers have been actively producing co-polymer PP in 2019. There are two main reasons. First, prices of co PP have been at least 700yuan/mt higher than homo PP raffia early in the year, and co PP products are clearly of higher added value. Second, co PP production consumes more ethylene, and it is more profitable when PP prices are apparently firmer than PE this year.

As the high-end co PP prices gradually fall to flat or even below that of homo PP raffia, producers begin to switch back production to homo PP recently. Ningxia Baofeng, Yan’an Energy, CSPC II, Shenhua Ningxia line #5, PetroChina Sichuan Petrochemical have switched their production from co PP to homo PP again, and there are more schedules of petrochemical plants in August.

After the evident price decline, there is still stock burden for co PP. The spread among different PP varieties will be narrow down, after producers actively switch production to varieties with firmer price and lower inventory pressure. According to the historical trend of low-MFR co PP, the intensive production switch to one category will more easily bring impact on the price. When capacity keeps growing, passive or on purpose production switch may hint that the industry is entering a time of surplus supply.


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