Recently China's polypropylene pellet market by crude oil and futures both fell to suppress the decline difficult to stop, as of now China's wire drawing mainstream fell 250 yuan/ton last week. In the short term, the petrochemical inventory is high and difficult to open the downward mode, and the downstream side is affected by market turmoil, the enthusiasm of replenishment is not good, the terminal demand is difficult to release a large number of market fundamentals are difficult to find support, and the market supply side pressure is still in the late stage.

In 2020, petrochemical destocking affected by the epidemic situation in China has increased, but 2020 is a big year for production. According to the statistics of Zhongyu Information, the new production capacity of polypropylene is expected to be 7.9 million tons in 2020, and the production capacity of polypropylene pellets in China is expected to reach about 33 million tons by then. However, some coal enterprises have been affected by the recent decline in crude oil or slow down the pace of production, but it is undeniable that this year's new production capacity has a larger impact on the market, and the petrochemical destocking is not satisfactory in the beginning of this year, Zhongyu expects that the pressure on the supply side will be difficult to reduce, and the petrochemical destocking will be more difficult.

Equipment maintenance point of view, after the Spring Festival petrochemical equipment to reduce the load production to reduce their own inventory pressure, but the duration is limited. According to the statistics of Zhongyu information, petrochemical equipment is mostly short-term parking, centralized maintenance is mostly concentrated in June, and it is difficult to solve the urgent high inventory of petrochemical in the short term.

And downstream, the start of the terminal demand has been delayed, but affected by the external environment, the downstream receiving of goods is limited, the replenishment of goods shows obvious periodicality, and the terminal demand is difficult to form sustained and effective support for the market. However, at present, the epidemic is spreading abroad, and the demand for masks may become a new demand bright spot. Some data predict that the epidemic will reduce the annual demand for PP by 200,000. 650,000 tons, if the mask production can bring 167,000. 288,000 tons (according to 116 million masks/day; The annual demand of 200 million PCS/day is calculated), then it can make up for most of the decline in PP demand in other areas of the epidemic. The new devices planned to be put into production this year are likely to be delayed, and the market will be supported in the later stage.

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