Polypropylene (PP) Aggregate: It's Hard To Support The Continuous Low Profit Market

In December, the domestic polypropylene aggregate market continued to decline. The continuous high level of the supply side made the market more worried, while the follow-up strength of the demand side was limited. The pattern of strong supply and weak demand in the market was hard to change. Petrochemical continued to reduce the factory price and actively destocked. The market focus was about 600 yuan / ton lower than that of the same period last month.
Crude oil prices were boosted by OPEC and non OPEC countries' efforts to continue to increase production reduction in the month, as well as the preliminary trade agreement between China and the United States. The strength of oil-based polypropylene fell by 49.60% from last month. Coal price slightly increased compared with last month, coal polypropylene profit fell at 33.74% month on month. The price of methanol fluctuated in a narrow range. The profit of methanol to polypropylene decreased by 32.53% month on month.
In January, the domestic polypropylene aggregate market is expected to decline in a narrow range. In terms of crude oil, China US economic and trade problems have eased and some oil producing countries have continued to reduce production. The positive news that US crude oil inventory has dropped to a new low level in two months will continue to boost the profit margin of oil-based polypropylene in the oil market, which may be on the edge of profit and loss. In terms of coal, at the end of the year, although the supply of power coal is reduced, it is still weak and stable in the case of low downstream terminal demand, and the profit of coal to polypropylene may continue to decline. In terms of methanol, in the near future, the supply of Methanol circulating goods continues to decline, and the demand for delivery of 01 contract and the demand for replenishment of downstream warehouses at the end of the year are superimposed. In the near future, the supply of tradable goods is tight or maintained, and in the medium term, methanol or still strong pattern is dominant, and the profit of methanol to polypropylene will continue to decline.