The hottest probe into the current situation of do

2022-08-13
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Explore the current situation of downstream demand in the plastic market

recently, China's bulk commodity market has risen like a rainbow, and polyolefins are no exception. Supported by high oil prices and inflation expectations, some operators are mostly optimistic about the trend of polyolefin prices in the fourth quarter, but some market participants are worried about the lack of downstream actual demand support, and the rise may not be sustainable

Because the strain of the elastic element is in direct proportion to the size of the external force P

a series of macro-control changes, such as RMB appreciation, energy conservation and power rationing, and interest rate hikes, seem to be enough to bring the downstream into the embarrassing situation of low peak season. But on Monday, by 3 The purchasing managers' index (PMI) released by the China Federation of logistics and purchasing rose from 53.8 in September to 54.7 in October, and the HSBC China Manufacturing Purchasing Managers' index rose from 52.9 to 54.8. This is one of the largest month on month growth since the data was first released in April 2004

what is the actual situation? E-commerce conducted a monthly survey on the downstream, taking agricultural film, container bags, BOPP film and PE pipes as examples, to uncover the mystery of the downstream demand of polyolefins:

energy saving and power limitation affected the employees' inner 10 points, and the impetuousness gradually subsided: the commencement of agricultural film plant "outshines others"

affected by the energy saving and power limitation in Jiangsu and Zhejiang in September, the commencement rate of container bags, BOPP film and PE pipes was lower than expected, especially the commencement rate of BOPP film fell significantly. Some manufacturers originally planned to increase the operating rate in September, but due to power rationing, they can only continue to maintain low load operation, while the downstream factories that were originally full load were forced to reduce their production, and only a few enterprises in the industrial park or with their own generators were not greatly affected

in terms of agricultural film, the construction cost of most enterprises in East and South China is not high, and North China has not been affected by power rationing, so the construction of agricultural film in September "outshines others"

the overall demand for raw materials in the downstream of polyolefin experienced a decline in September. Specifically, except for the slight decline of agricultural film, the demand for raw materials in the other three industries decreased significantly. Of course, this is also related to the polyolefin price shock in September, and buyers mainly consume raw material inventory and purchase on demand. In October, in the process of price rise, the manufacturer's inventory showed an upward trend, and bargain hunting began to perform from the beginning of October

the survey found that the downstream construction started to increase significantly because the downstream gradually entered the peak production season and the power rationing in Jiangsu and Zhejiang regions basically ended in October. In particular, BOPP membrane has become the "hardest hit" in four industries due to power rationing in September, and the completion of orders has been affected. In October, most BOPP membrane manufacturers operated at full capacity, and the overall operating rate reached more than 95%

in addition, agricultural film has also increased significantly, from the average operating rate of about 60% in September to 79%. Although the downstream is more resistant to high raw material prices, and a large number of raw material reserves are not willing to be high, because the operating rate has increased significantly, manufacturers have to accept high priced raw materials to maintain production. In October, the downstream purchase of raw materials such as container bags and agricultural films increased significantly, and the overall downstream demand for raw materials was at a high level in the past year, indicating that the downstream demand was strong in October

focus on profit margin - "PE pipe" looks beautiful

in view of the rising prices of raw materials and agricultural products to varying degrees, the quotation of agricultural film enterprises for agricultural film increased in October, and the profit level increased significantly. In September, the supply of BOPP membrane decreased due to the decrease in the operating rate of power rationing. Manufacturers have raised their quotations one after another, and the increase is greater than the increase in raw material costs. Therefore, the profit level in October is considerable

however, not all downstream companies benefited from the transmission of price rise in the industrial chain. PE pipe manufacturers reported that although the cost of raw materials increased significantly, considering the affordability of end buyers, the price increase of finished products was small, so its profit space was squeezed. Although before August, the profit of PE pipe has been the first in the four downstream, it has fallen below that of other products in the past two months

there is uncertainty about future orders

in October, downstream domestic trade sales were better than in September, but some downstream exports were poor

pp film sales improved slightly, because some manufacturers were unable to pay bills on time due to power rationing in September, but concentrated on October. Considering the unstable price of raw materials, some manufacturers mainly accept short-term orders to avoid narrowing the profit space after the price rise of raw materials

2. The export-oriented processing enterprises in the containerized bag industry said that foreign demand was still unstable. Coupled with the appreciation of the RMB, the number of foreign orders was significantly reduced. At present, some enterprises have developed the domestic market in order to transform

3. Agricultural film enterprises reported that due to the expected cold winter this year and the soaring prices of agricultural products, farmers' enthusiasm for production has increased, and the strong demand for greenhouse films, orders from agricultural film plants in most regions have increased, except for the poor acceptance of orders from individual manufacturers in Antarctica

although it is the peak season at present, many enterprises are in short supply, and orders are generally better than in September. Among the enterprises we surveyed, some orders can be produced for 1/month, and more than 20% of the orders are even more than 60 days. However, some areas in the North began to frost in November, and the outdoor engineering volume will decline, so the sales of pipes in October did not improve

in the survey, many manufacturers said that if there is no power restriction in November, they will continue to maintain high load production, and the operating rate in November is expected to increase slightly on the basis of October. At the beginning of November, the inventory of downstream raw materials is still low, and the current downstream profits are OK, so it is expected that the downstream will be replaced in November; The purchase of raw materials will remain at a high level

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