The polypropylene market is becoming increasingly competitive
new crown global epidemic, mask demand, Short-term market chaos, leading to the mask upstream raw material polypropylene (PP) price in a short period of time ""roller coaster"", but because China's existing melt-blown cloth production capacity (excluding fake and shoddy production capacity) of PP melt-blown material demand accounted for less than 1% of the total consumption of PP, so this ""chaos"" will soon return to reason.
Overall, in the next few years by the release of new production capacity and economic growth slowdown, China's PP market will gradually show a balance between supply and demand and even local surplus situation, when the market competition will be more intense, The high-end, functional and differentiation of product performance and the constant quality of products, the digitalization of sales methods, and the diversification of export channels will be the development direction of PP industry.
Polypropylene has good electrical properties, high frequency insulation, high strength, high rigidity and heat resistance, the downstream product forms are mainly woven bags, injection molding, film, fiber, pipe and other products, Widely used in packaging, automobiles, home appliances, building materials, daily necessities and other fields. In the past 10 years, the global market demand has increased by 61.4%, reaching 75.86 million tons in 2019, accounting for 28% of the main thermoplastics.
multi-agent interaction competition form
In 2019, China's PP production capacity and output were 27.03 million tons and 23.2 million tons respectively, and central enterprises such as Sinopec, petrochina and CNOOC have been formed. China Sha (Tianjin) Petrochemical, Sino-Korea (Wuhan) Petrochemical, CNOOC Shell and other joint ventures, Hengli Petrochemical, Zhejiang Petrochemical and other private enterprises, coal chemical enterprises, propane dehydrogenation enterprises and imported products multi-subject interaction competitive pattern, of which Sinopec has the largest production capacity, accounting for 26% of China's total production capacity, followed by China Petroleum, accounting for 18%. From the source of raw materials, oil-made polypropylene accounts for the largest proportion, 59%, followed by coal-made polypropylene, accounting for 25%, as shown in Figure 1.
figure 1 China's polypropylene raw material structure
in the future with new project put into production, the polypropylene production capacity will be rapid growth, It is expected that by 2023, China's polypropylene production capacity will exceed 35 million tons, and the self-sufficiency rate will be nearly 90%, as shown in Figure 2. By then, in addition to the high-end products that can not be replaced, the balance between supply and demand will be basically achieved, and the market competition will be more intense.
China's polypropylene supply status and forecast
demand growth gently down
China's polypropylene product drawing and occupies a large proportion of the plastic injection, 37% and 27%, respectively. Film and sheet material accounted for about 24%, fiber material accounted for about 8%, tube material accounted for about 4%, as shown in Figure 3. In the future, with the increase of consumption base and the slowdown of economic growth, the growth rate of China's polypropylene demand will show a gentle decline.
polypropylene consumption structure figure 3 China
PP (polypropylene) is mainly used for drawing Woven products, cement, chemical industry, grain, feed, building materials and other fields of the outer packaging, of which the largest amount of cement bag. With the increasingly stringent environmental protection policies and regulations such as plastic restriction, the demand for cement, building materials packaging and disposable plastic straws, toothbrushes, etc., will continue to reduce the proportion of wire drawing materials in PP consumption structure.
PP note plastic is mainly used in small household appliances, daily necessities, washing machines, toys, automobiles and turnover boxes. Although due to the rise of Internet e-commerce and the improvement of people's living standards, the demand for all kinds of small household appliances is increasing rapidly, but by the decline in the growth rate of automobile sales and the impact of real estate tightening policy, generally speaking, the growth rate of demand for plastic is slowing down.
PP film material is mainly used in food packaging, according to the processing technology can be divided into BOPP film, CPP film and IPP film, of which BOPP film the largest amount, but because the price is relatively low wire drawing material replacement, BOPP accounted for the decline; The proportion of CPP special material has increased, so the overall proportion of PP film material is stable.
PP fiber is mainly used in decoration, clothing, medical and health fields. With the implementation of the two-child policy and the worsening trend of China's aging population, especially the outbreak of the new coronavirus pneumonia since the beginning of the year, the demand for downstream health protective articles such as wet wipes, diapers and masks has surged, and the supply of fiber materials in China has been in short supply.
PP pipe material is mainly used in water supply, heating system, etc. It has the advantages of light weight, convenient transportation, good environmental protection performance and recyclable use. With the advancement of urbanization and the northernization of winter heating methods in the south, the growth rate of demand for pipe materials is rising.
still needs a large number of imported high-end products
In 2019, China imported 3.491 million tons of primary shape polypropylene (homopolymer PP), and 1.550 million tons of ethylene-propylene polymer (copolymer PP). Other primary shape propylene copolymers were 182,000 tons, with a total import volume of 5.223 million tons, mainly from the Asia-Pacific region and the Middle East including South Korea, Singapore, Taiwan Province of China, Thailand and Japan, as shown in Figure 4.
Figure 4 Main import sources of polypropylene in China
In recent years, with the release of new production capacity of polypropylene in China and the strengthening of local polypropylene production enterprises, the export volume showed a rapid rise, reaching 406,000 tons in 2019, an increase of 13.8%. Mainly exported to Vietnam and other surrounding areas, as shown in Figure 5. Actively developing export channels will become an effective way to solve the contradiction between supply and demand in China's polypropylene industry in the future. Figure 5 China's polypropylene export volume and export price trend in the past 10 years From the perspective of import categories, the import volume of homopoly PP still occupies the largest proportion, and the overall trend is a gentle decline, but in recent years, due to China's ban from importing ""foreign garbage"" from abroad, the import volume of new materials has increased slightly. The proportion of copolymerized PP is relatively small, but it is on the rise, and the average price is higher than the average price of imported homopolymerized PP and the average price of imported polypropylene as a whole, as shown in Figure 6.Figure 6 China's polypropylene import volume and import price trend in the past 10 years
Due to China's lack of high-end product research and development capabilities, and product homogenization is serious, some high performance and special performance products, Such as metallocene PP, special BOPP film, CPP film and so on still need a large number of imports to meet the demand of the Chinese market. China's metalcene PP annual consumption of about 100,000 tons, in addition to a small amount of Yanshan petrochemical supply market, basically rely on imports, mainly used in the production of medical or food with high transparent PP products, food packaging film, non-woven fabrics, ultra-fine deniable polypropylene fiber and other fields. With high tensile speed and width, ultra-thin, ultra-transparent and better low-temperature thermal sealing performance of special BOPP film, electrical film, capacitor film, aluminized film PP film materials and cars and home appliances with PP injection plastic annual imports are more than 1 million tons. The annual import volume of PP pipe material is about 500,000 tons. In the future, with the improvement of China's innovation capacity and the operation of foreign-funded enterprise projects, the output of high-end polypropylene products will also grow rapidly, and the dependence on foreign countries will be reduced.China's polypropylene imports are mainly concentrated in the southeast coastal areas, accounting for about 90% of the country's total imports, of which Guangdong Province PP imports for many years ranked first in the country, in 2019 imports of 1.798 million tons, accounting for 34.4% of the country's total imports; Zhejiang Province ranked second, accounting for 23.7% of the total imports, as shown in Figure 7. This is mainly due to the southeast coastal area where most of China's PP processing enterprises and downstream users are concentrated. Among them, PP demand in East China accounts for about 35.6% of China's total demand, ranking first in the country; South China followed, accounting for about 30%.
figure 7 imports statistics in PP mainly import provinces in China
the market price will be low shock
Because the current naphtha cracking to propylene route is still the main source of polypropylene raw materials in the world, but also the main supply force of polypropylene market in China, the price of polypropylene products is closely related to naphtha, and further to crude oil prices. As shown in Figure 8. Oil price and supply and demand are the main factors affecting the price of polypropylene.
figure 8 polypropylene, acrylic, naphtha and crude oil market prices
overall In 2019, the price of polypropylene in China was under downward pressure. At the supply level, the huge new production capacity outside China is expected to be put into operation, resulting in continued amplification of pressure on the supply side; At the demand level, affected by the slowdown in economic growth, the downstream demand side increased less than expected, and the prices of polypropylene products continued to fall at both supply and demand levels.
Since the beginning of 2020, the novel coronavirus pneumonia epidemic has spread widely, which has made the global economy worse. The downstream demand support has been further weakened, and the cost side has been affected by the rapid decline in crude oil prices, and the product prices have continued to fluctuate at a low level.
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