The short-term rise in plastic prices is clearly in the market test
The short-term rise in plastic prices is clearly in the market test
In mid-january, dalian plastic oscillation after bottoming rally ahead of the international crude oil, main 1505 contract from the lowest 7920 yuan/ton rose to more than 9300 yuan/ton, up more than 17%, date line continuous out 9 male thread, short-term strength obviously. But for the medium term, given that some market expectations have not been fulfilled in the last few years, we believe that the demand will need to be followed in the later stage, and the demand will determine the height and duration of this round of plastic rebound.
Domestic interest rate cut
On February 5th the central bank cut the reserve requirement ratio by half a percentage point and released about rmb600bn. The market is widely expected to cut interest rates again in the first quarter to stimulate the economy amid a weak manufacturing sector. Loose expectations are important reasons for the rebound of some industrial and energy - based varieties.
But the momentum of the renminbi's depreciation has continued and hit a new low, indicating the difficulty of the central bank's decision to cut interest rates. At the beginning of march, the national two sessions will open, and if the short-term interest rate cuts do not take place, they will hit the market sentiment, and the price will be adjusted accordingly.
International crude oil or a double dip
Since the end of January international crude has risen sharply below $45 a barrel, with international crude rebounding more than 22 per cent in late February. But recent supply increases have been subdued, and OPEC has reiterated that it will not cut production, and that international crude oil rebound has weakened significantly. According to the latest EIA report, U.S. crude oil inventories rose 7.7 million barrels, a record high, and U.S. crude oil production will reach 9.3 million barrels a day in 2015, the highest level since 1972. If the fundamentals of crude oil stay current, the likelihood of a second dip in the price of crude oil will rise, which will have a big impact on the prices of downstream energy commodities.
The focus will shift to supply and demand
The collapse of interest rate expectations during the Spring Festival holiday and the weakness of international crude oil performance will make the plastic rebound difficult, and future market focus may return to supply and demand.
In general, the "two barrels of oil" pretty price will support the spot price of plastic, and backwardation will promote futures rebound, but the price of this operating mode is being challenged by the appearance of coal chemical industry, "two barrels of oil" no longer alone big, low-cost advantages of coal chemical industry impact the ethylene oil system. Of course, since the third quarter of last year, the price of ethylene has continued to fall, and the average cost of coal and chemical industry has fallen below the average cost. But since the beginning of January, the price of ethylene has rebounded rapidly, making it possible for the cost advantage of coal chemical industry to appear again. Therefore, we judge that high production of ethylene will limit the price of ethylene to further rebound.
Due to the weak overall manufacturing industry, the downstream purchasing motivation is not high. Even if the "two buckets of oil" take a good price, the price of ethylene will rebound more quickly than optimistic.
