Thetotal PVC market inventory this week was 409,000 tons, a decrease of 5.32% fromlast week, and a year-on-year increase of 25.85%; Eastern China decreased by6.15% from last week and increased by 18.85% from last year; South Chinadecreased by 3.25% from last week, and increase of 46.91% year-on-year.
Statisticsand estimated data show that in the first quarter of 2019, China's PE operatingrate increased month by month, and maintained at a high load operation above95%. In terms of breakdown, LDPE started production at 85%-91%, LLDPE startedproduction at 99%-102%, and HDPE started production at about 94%-103%. On thewhole, the domestic supply of PE is sufficient, and the domestic market isfacing pressure on the market.
Thedomestic supply is sufficient and the source of imported goods is alsoincreasing. Sinopec and the port inventory remain high. In mid-to-late March,petrochemical inventories remained at 930-1.01 million tons, slightly higherthan the level of 910-99 million tons in the same period in 2018. The PE portinventory range is 370-41 million tons, which is slightly lower than the 400-44million tons in the same period in 2018, but its inventory is still at a highlevel.
Although the increase in inventory is normal with thecontinuous increase in supply, in recent years, domestic and foreign supplypressures have led to intensified market competition. At the end of 2018,petrochemical and some coal-based companies indicated that they will maintaintheir light storage operations in 2019. Obviously, the continuous increase ininventory is inconsistent with the domestic light storage operation. Under theforced supply pressure, most petrochemicals and agents are actively reducinginventories. The price of PE in China has fallen. Taking PetroChina 7042 in theNorth China market as an example, it fell to 8650 yuan/MT in late March, andits price is basically close to the low point in the past three years.
From the perspective of terminal demand, the startof domestic downstream products in March 2019 has mostly increased, of whichthe start-up load of the agricultural film has increased the most, followed bypipes. Compared to the same period in 2018, the start-up rate of variousindustries in the same period of 2018, satin finish and injection molding werehigher than the same period last year, the pipe material was lower than thesame period last year, and other packaging film and hollow industries did notchange much.
As usual, the start of plastic products companies inApril is still expected to increase compared with March. At present, China’s PEprice is close to the lowest point in the last three years. Although themid-upstream is still reducing inventory, PE prices are still supported. Drivenby the expansion of corporate loans and other factors, the industry does notneed to be overly pessimistic. Please always pay close attention to thetransactions of low-end sources in the market.
[Hangzhou Jinghong Chemical Materials Co.;LTD[http://www.zjjhchemical.com/en/]