The growth of plastic imports has reduced the supply pressure
The growth of plastic imports has reduced the supply pressure
In terms of LLDPE pattern of supply and demand in the first half of this year, although the second half of 2014 and put into production supply of coal in polyolefin plant best state, prompting LLDPE to further improve the overall production, but the domestic supply of low-cost generic material picks up, are prompting import growth is slowing, and the reality of the global supply of ethylene or late further restrictions on imports.
The increase in domestic capacity has led to a drop in import dependency
With the increase of domestic low cost coal chemical production capacity in recent years, the external dependence of PE and LLDPE in China is decreasing, and the total net imports of LLDPE are decreasing. According to the relevant data, the cumulative import volume of PE in January and may was 4.22 million tons, a year-on-year growth of 5%, which is roughly equivalent to the import growth rate of the same period last year. 1, 5 month, LLDPE accumulative total imports of 1.13 million tons, up 1.2% from a year earlier, and external dependency of LLDPE was 33%, significantly less than 44% of the whole external dependency, PE is lower than that of LDPE and HDPE external dependency. This may be related to the current production of LLDPE for most of the coal production.
In terms of the spot market, with coal starts gradually improve polyolefin plant, since this year, at a low price LLDPE supply basic is given priority to with 7042 coalification process, and promote the domestic general material supply has basically can meet the domestic demand, imports mainly focused on the part of the materials. As a result, the price of LLDPE futures, which is used as a measure of general material, has been weakened by the import impact, and the spread of some special plastic and futures LLDPE has been further extended.
The ethylene supply bottleneck causes the cost of crude oil to fracture
Because in China before 2012 ethylene cracking performance is poorer, less naphtha route ethylene plant start-up in recent years, in addition to the 2014 sichuan 600000 tons of production capacity, delivery, in recent years has been no new naphtha to ethylene device. However, due to the obvious increase in the profits of products such as ethylene oxide from 2012 to 2013, the production capacity of related devices has been improved obviously, which has aggravated the situation of insufficient ethylene supply. In addition, the coal - making polyolefin device which was put into operation in 2014 basically has a downstream polyethylene project. Therefore, the problem of insufficient domestic ethylene supply is difficult to alleviate in the short term.
Abroad, the Middle East planning ethylene plant is less, not more than 3 million tons, the rise of the north American shale gas lead to the cost of ethane to ethylene obvious advantages, is expected to have 2016-2016 8.1 million tons/year plant start-up. But oil prices lead to cost advantages of ethane to weaken, part of the planning project will not enter the building, new capacity on the total amount is lower than previously expected, not only is expected to put into production will delay the time, really have capacity to release may have to wait until 2017.
In view of this, we believe that short-term LLDPE import volume recovery space is relatively limited, which will not lead to the overall oversupply. At the same time, due to the price of ethylene or long-term strength, the decline of import volume of LLDPE common materials will become the norm. It is suggested that relevant trading enterprises should pay more attention to the general market and change the import varieties.
