As of September 25, Shandong propylene market price of 8200 yuan / ton, near the beginning of July rose 19.2%. Shandong propylene market price is already in the year high, but its downstream market in general. What is the reason? Let us look together.

Downstream market weakness, market support is limited

Polypropylene, butanol and propylene oxide, as the three major downstream propylene, the impact on the propylene market. Polypropylene powder market price is relatively stable, stable at 8600 yuan / ton in the vicinity. But the price of polypropylene futures fell, down 6.41% higher than the previous high, powder shipping pressure. Powder pellet spreads smaller, powder sales pressure, part of the factory losses, market weakness. The propylene oxide market has experienced a sharp decline in the market after the peak of August. Early high 13,500 yuan / ton, as of September 25, propylene oxide prices fell to 10,000 yuan / ton cash factory, the higher fell 25.9%. Octanol market prices are relatively stable, stable trend, but the early octanol high in the 9100 yuan / ton in the vicinity, as of September 25, octanol prices fell to 8600 yuan / ton, the higher down 5.49%. From the downstream trend of propylene can be seen, the current downstream market conditions are relatively weak, limited support for the propylene market. But in the downstream market situation weakened, why can the propylene market can be strong, and even continue to rise it?

Part of the downstream profits considerable, positive for the procurement of propylene

The main downstream propylene propylene propylene, butanol, acrylonitrile, acrylic and other products are relatively substantial profit margins, although the decline in propylene oxide prices, but the profit is still around 2,000 yuan / ton; octanol prices stable at 8600 yuan / ton, Profits are significantly lower than the previous period, but the profit is still 750 yuan / ton, acrylic, acrylonitrile and other products are in the profit of 2,000 yuan / ton, a strong support for propylene. Polypropylene powder profit although the reduction, even in the vicinity of the cost line, but the pre-profit situation is better, good support for propylene.

Downstream start load high during the year to support the market

Propylene downstream operating rate (20170707-20170922)
Date powder PO n-butanol octanol acrylonitrile acetone acrylic acid acrylic method ECH isopropyl alcohol
7 July 59.14% 84.00% 61.87% 82.93% 87.00% 76.75% 55.00% 81.24% 83.33%
September 22 62.10% 83.00% 74.46% 98.96% 83.87% 76.00% 62.00% 85.11% 53.00%
% 2.96% -1.00% 12.59% 16.03% -3.13% -0.75% 7.00% 3.87% -30.33%

The downstream market conditions weakened, but the factory started relatively stable, the start load in the year high, polypropylene powder, butanol, acrylic and other major downstream factory operating rate rose sharply, propylene oxide operating load although a slight decline, but still in the year High position. Downstream start load is high, stable demand for propylene procurement.

In summary, the propylene market has been able to strong rise, and the downstream high profits and high start is inseparable. Downstream factories have stocking demand, propylene market shipments improved. Part of the factory equipment maintenance, and individual factories to reduce the amount of long, good support for the propylene market. Refinery inventory low, very price intention strong, pre-holiday high market consolidation of propylene. But the polypropylene powder market is not optimistic about the current market, the spot price upside down, shipping pressure. If long-term losses, it will cause the impact of emission reduction, the propylene market has a greater threat, we must pay close attention to the market trend of polypropylene powder.