The hottest plastic supply increases, and the dema

Plastic supply increases, demand is difficult to burst

in terms of fundamental demand, may and June are in the off-season, and downstream demand is difficult to burst; The economic data in the second quarter continued to fall, and the demand for plastics (8035, -50.00, -0.62%) is expected to remain sluggish. Supply: Petrochemical inventory has declined; At present, the production profit of petrochemical enterprises has declined relatively, but it is still in the high range, and the production power is strong. At the end of May and the first half of June, the devices that have been overhauled in the early stage are restarted one after another. The possibility of restarting as planned is very high, and the supply pressure will increase greatly. The restart capacity of PP is larger. Increased supply and flat demand will suppress market prices

I. market review

pe:

lldpe1609 contract rebounded from 6500 at the end of November 2015 to the beginning of March, entering a high shock platform. The highest price appeared at 8985 yuan/ton on April 27 (the high and low points increased by 38.2%), and has been falling since then. The low point appeared at 7760 yuan/ton on May 23, just spitting back 50% of the increase since the end of last year

, the fluctuation of spot price is much smaller, which is less than half of that of futures. Basis represents spot premium

pp:

pp1609 also rose to a high level in early March, and then fluctuated. After seeing the highest level of 7255 on April 27 (an increase of 40.6% relative to the low at the end of last year), it continued to fall, spitting back nearly 50% of the increase since the end of last year

in terms of spot, the fluctuation range of PP spot almost caught up with that of futures. Compared with LLDPE, the spot volatility is much higher. PP is also in the status of spot premium

II. Fundamental analysis after confirming that the equipment has been connected to the power supply line

supply:

in terms of PE devices

the 300000 ton new capacity of China Coal Mengda was successfully put into production and supplied to the market in April. In the second half of this year, there is still a potential 550000 tons of new capacity to be put into operation (possibly in August and October). With the completion of the overhaul of the device, the production capacity of nearly 1million tons will be restarted in batches at the end of May and the beginning of June, and the supply pressure will increase. In 2015, the total domestic PE production capacity was about 15million tons

pp device

a total of 650000 tons of production capacity was put into operation in March and April, and hundreds of thousands of tons of production capacity are still planned to be put into operation in recent months. There are more than 2 million tons of potential new production capacity planned to be put into operation this year

in addition, the early maintenance capacity of nearly 2million tons is planned to restart at the end of May and the first half of June

lldpe imports are in a state of loss (relative to the domestic ex factory price), and relative to the market price, it is likely to break even

in terms of inventory,

exchange inventory: on May 25, the LLDPE registered warehouse receipts of Dachang exchange: 721. The number of PP warehouse receipts registered by Dashang office: 302

Petrochemical inventory has decreased, and the pressure is not great; At present, the production profit of petrochemical enterprises has decreased relatively, but it is still in the high range, and the production power is strong. At the end of the month, with the completion of some maintenance, the supply pressure increases

upstream:

1) at present, crude oil inventories are high and substantial production reduction in major producing countries is far away, but the impact of some unexpected supply disruptions has supported the market. The Brent crude oil index continued to rise, and the moving average maintained a long line. Technically, we should still guard against top deviation

2) the crude oil market shows a situation of OPEC increasing production and the United States reducing production. The global crude oil inventory is high, but it faces an inflection point

3) on May 12, Iran's daily crude oil production in April reached 3.56 million barrels, returning to the level before the sanctions. In April, exports increased by 40% month on month to 2million barrels/day, and the purchase volume of China, the largest buyer, increased by 57%

4) Platts energy news on May 11: OPEC's crude oil production in April was 32.52 million barrels per day, an increase of 140000 barrels per day month on month, due to the sharp increase in the production of Iran and Iraq

5) Russian official data show that Russia's monthly crude oil output this year is about 180 million tons, an increase of 2.7% year-on-year. In addition, according to foreign media reports, especially the rare earth magnesium nodular cast iron successfully developed by China, Russia's crude oil exports increased significantly to the highest level since at least 2008 in April, mainly due to the sharp increase in East and West demand for Russian crude oil

demand analysis:

macro demand assessment:

1) the "L-shaped trend" theory of economic operation of "authorities" on May 9 and the comprehensive decline of credit data and economic data in April continued to hit the market demand confidence. But we should not be overly pessimistic. On March 24, Li Keqiang said that in the process of promoting structural reform, short-term and small fluctuations are inevitable. Once the economic operation slips out of a reasonable range, comprehensive measures will be taken decisively

plastic industry level:

downstream Construction: May and June are in the off-season, and downstream demand is difficult to explode

the total output of plastic products and plastic films in China shows an upward trend year by year, but the growth rate of output has slowed down significantly and is much lower than the growth rate of production capacity. In the later stage, China's economy will enter an L-shaped operation, and the downstream demand for plastics will continue to be flat

III. conclusion and operation strategy

in terms of fundamental demand, may and June are in a low season, and downstream demand is difficult to explode; The economic data in the second quarter continued to fall. The computer display is used to show the whole process of the experiment, and the demand for plastics is expected to remain low. Supply: Petrochemical inventory has declined; At present, the production profit of petrochemical enterprises has declined relatively, but it is still in the high range, and the production power is strong. At the end of May and the first half of June, the devices that have been overhauled in the early stage are restarted one after another. The possibility of restarting as planned is very high, and the supply pressure will increase greatly. The restart capacity of PP is larger. The technical level of crude oil remains strong. In terms of fundamentals, a substantial reduction in production in major producing countries is far away. We should still guard against technical deviations

operation suggestions:

the demand for plastic in the late stage is flat, and the supply is increased. In operation, PE waits for a rebound to 8300-8500 to enter and sell short, or selects a short, fast in and fast out above the 144 day moving average; PP sell short when high, and the upper pressure level is 6800

IV. risk tips:

1) output suffers from accidents

2) the Federal Reserve stopped raising interest rates, and oil prices opened up room for rise