At the end of September, the price of propylene oxide in Shandong climbed to 12800-12950 yuan/ton. However, some parts of propylene exceeded 10,000 yuan, and liquid chlorine turned “positive” to more than 1,000 yuan. The cost pressure was prominent, and the profit of cyclopropane fell to a new low in the year, only less than 1,300 yuan. POThe price increased by 25% compared with the same period last year, but the profit decreased by 49%.
During the festival, the major manufacturers in Shandong have raised their prices one after another, and the price of liquid chlorine on the cost side has been loosened. Currently, PO cash ex-factory report in Shandong is 12900-13000 Yuan/ton, the profit is around 2100 Yuan/ton.
From the supply side, the supply of PO factories has been tight recently, and there is no pressure on inventory. There are factories in the north that are scheduled to maintain and reduce their load, which is expected to last until the end of the month; the 100,000-ton plant in central China has recently dropped to 50-60%, and the recovery time is undetermined. A plant in Shandong is also expected to overhaul. Jishen’s PO device is also delayed. In terms of imported goods, the volume has increased compared with the same period last year, but the volume of re-exports to Japan has also increased, and the after-tax price is basically the same as the domestic price, so the impact is relatively small.
From the perspective of demand, the fourth quarter is still the peak season for soft foam. Although the overall operating rate of the downstream is not good due to environmental protection and other factors this year, the normal replenishment after the holiday is expected to pick up. For PO Although the high price is in conflict, it is still under pressure and rising. At present, there are polyether manufacturers in East China and Northeast China that stop or reduce load for maintenance as planned. In addition, the second round of environmental inspections started on June 11. Combined with the second batch of environmental inspections to be launched this month to “look back”, the state will continue to pay attention to the environmental governance of industrial enterprises. Although the “one size fits all” lazy policy is strictly prohibited, under the “heavy pressure” of environmental protection, the underutilization of polyurethane downstream is expected to continue.
Forecast
The last quarter of 2018 kicked off with the ultra-low profits of ciproterone, and it is expected that it will be difficult to see the “splendid scene” where prices and profits were at the same high level last year. In the short term, high prices on the demand side conflict with insufficient production, but the pressure on the cost side still exists, the supply side is tight, manufacturers are shipping smoothly and inventories are low, and it is expected that the “Silver Ten” price will hardly fall back. Look, the pressure on environmental protection remains unabated, the weak start of downstream operations continues, and domestic and foreign PO new installations are expected to start up; but near the end of the year, the downstream has a stocking mentality . It is expected that the long-short game will cause the price to fluctuate.
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