Before and after the Dragon Boat Festival, the domestic propylene oxide market showed a narrow range of volatility, after a small rise in stock before the festival, the market stabilized, the pressure fell after the festival, but with the price falling, some of the process reached the cost line near the appropriate support market, and recently showed a deadlock, but the follow-up market operation logic is expected to supply and demand, the cost is supplemented, after the impasse, it is still expected to be weak.

一.The supply side is stable and the incremental market is slightly comfortable

In mid-June, with the resumption of normal operation of Zhenhai phase I equipment, Jiahong New Materials, Qixiang Tengda stable negative, the market supply gradually climbed, reaching the highest position in the year, June 29 data, the domestic daily output of propylene oxide can reach 12,800 tons, capacity utilization rate of 74.67%, the market supply is comfortable.

In the Dragon Boat Festival, the market trading is stable and light, the supply side has some pressure on the production factory, the price talks down, the offer down to 9200 yuan/ton (Shandong spot exchange factory) after the holiday, the overall shipment recovery, reduce the previous pressure on the market to slow down, but only balance Nissan, some small digestion inventory, still no clear upward momentum, the market stalemate.

In the follow-up, Taixing Yida 150,000 tons/year HPPO device and Wanhua Phase 2 300,000 tons/year PO/SM device are expected to restart in early July, Zhejiang Petrochemical 270,000 tons/year PO/SM device is currently under slightly low load commissioning, and it is expected to be put on the market at the beginning of the month, with incremental cashews in both north and south. The shrinkage is only 300,000 tons/year of Jincheng Petrochemical follow-up or parking elimination possibility, the overall is still mainly incremental, and the supply side is difficult to support.

二.Raw material price recovery cost line into a price defense line

In terms of cost and profit, during the Dragon Boat Festival holiday, the price of raw material propylene and liquid chlorine have risen, especially the price of liquid chlorine has changed from negative to positive, and the cost has been significantly lifted. During the Dragon Boat Festival holiday, the price of hydrogen peroxide has returned to more than 8000 yuan/ton for the first time. At the same time, from the perspective of HPPO process, the price of hydrogen peroxide has increased slightly, and the theoretical cost is 9000-9200 yuan/ton. The increase in the cost pressure of HPPO devices also supports the market mentality to a certain extent, and some downstream watch the first line of defense of CIC prices, moderately follow up the purchase, and the market is temporarily deadlocked at 9200 yuan/ton price after the festival.

In the follow-up, the price of propylene may have a narrow decline, and the price of liquid chlorine and hydrogen peroxide is mainly consolidated, although the cost can be used as a defense line to play a certain supporting role in the price, but the impact of supply and demand fundamentals is relatively greater.

三.Downstream buying scattered cautious wait

From the perspective of downstream demand side, purchasing is relatively scattered throughout the month, and the initial bearish sentiment is still dominated by just need to follow up, and the downstream terminals have no intention to stock up. Occasionally, the accidental maintenance of devices in the month causes the spot to be slightly tight, and the downstream purchases are small, but the sustainability is insufficient. The profitability of the second downstream propylene glycol and alcohol ether industries is low, and the industry capacity utilization rate is relatively low, which has limited support for the cyclopropylene market.

The following July is still the downstream off-season, coupled with the wait-and-see supply side device increment, downstream sentiment is bearish and continue to cautiously buy, which is expected to have limited support for the market.

四.It is expected to remain weak after the stalemate

Conclusion (short-term) : The supply and demand of cyc market is in a delicate balance, and it is in a dilemma for the time being, but next week, with the increase of some devices at the beginning of the month, there may be a narrow decline.

Conclusion (medium and long term) : In July, the supply side increment is obvious, the downstream off-season support is limited, with the supply and demand pattern becoming more and more abundant, the first cost line or impact is limited, the market price is still expected to fall mainly in a narrow range, the trend is downward, but the cost of chlorol method as the second line of defense is expected to have some support for the market, and the downside is more limited. It is expected that the price of cyclopropyl will fluctuate within the range of HPPO cost and chlorol cost, but it is necessary to pay attention to the unexpected fluctuations of the device surface and the impact of high temperature power limiting in summer. The price operation logic of cyC is still based on supply and demand, supplemented by cost.

Risk warning: uncertainty of the incremental time node of the device surface; If the cost pressure after the enterprise enthusiasm to start; Demand side actual consumption landing.