Declining demand + shutdown for maintenance, PE output may continue to decline in May!

PE fundamentals continue to be weak, and cost support is also weak. Supply-side disturbance factors exist for a long time, while macro pressure remains unabated. The risk of economic recession caused by US debt continues to suppress PE. Short-term PE may be weak and volatile Mainly.

  OPEC stated that it has no intention to further cut production. As the recession sentiment rises, oil prices may continue to be under pressure, and the support for PP will be further weakened. Moreover, PP is basically not enough to support its price, and PP is weak and hard to change.

  breaking news

  1. China's exports of plastic products in April increased by 8.5% year-on-year, and the decline in imports expanded again

  In April, China's exports of plastic products (in US dollars) increased by 8.5% year-on-year, and the previous value increased by 14.8%. Exports were basically in line with market expectations, while imports were lower than market expectations.

  In April 2023, the volume of imported primary plastic raw materials was 2.147 million tons, a year-on-year decrease of 110.7%; the import value was 23.99 billion yuan, a year-on-year decrease of 21.1%. From January to April, the amount of imported primary plastic raw materials was 9.511 million tons, a year-on-year decrease of 7.6%; the import value was 103.04 billion yuan, a year-on-year decrease of 17.6%. The low volatility of international crude oil prices has led to a decline in foreign polyolefin prices, which has intensified the negative impact on the domestic polyolefin market in the country, and the polyolefin import arbitrage window occasionally opens.

  From the perspective of the average value of imported primary plastic raw materials, the price initially fluctuated and rose after bottoming out in June 2020, and then began to fall after the monthly average price reached a new high in June 2022, and then fell for five consecutive months. As shown in the figure, the average price has increased in April, and the cumulative average price from January to April has also increased.

  2, April PE domestic production decline may further decline in May

  In April 2023, the domestic PE output was 2.2309 million tons, a decrease of 66,700 tons or 2.90% compared with March, and an increase of 408,400 tons or 22.41% compared with the same period last year. The main reasons are as follows: firstly, due to sluggish domestic demand, lower market prices, and more maintenance of domestic petrochemical equipment; secondly, the operating cycle of domestic petrochemical equipment has been reduced by one day compared with March.

  Among them, the high-pressure output was 266,000 tons, an increase of 5,300 tons or 2.03% month-on-month; the low-pressure output was 1,038,300 tons, a decrease of 1,700 tons or 0.16% from the previous month, and the linear output was 926,600 tons, a decrease of 70,300 tons or 7.05% from the previous month. In April, the domestic petrochemical operating rate was 81.24%, which was 0.53% higher than that in March. The operating rate of Hainan Refining & Chemical, Jinhai Chemical, and Guangdong Petrochemical's new equipment was operating normally after the operating rate gradually increased.

  After May, domestic demand further declined, prices continued to fall, domestic petrochemical maintenance equipment increased, and output losses increased. The domestic production figure will further decline, but with domestic capacity expansion, domestic supply still increases year-on-year.

  3. Internet platform takeaway plastic packaging has increased by 9 times in 5 years

  Recently, the "Research Report on the Environmental Impact of Food Delivery Packaging Plastics and Recycling (2021)" was released a few days ago. The report shows that since 2015, China's food delivery industry has experienced explosive growth, and the number of food delivery orders has increased from 1.7 billion in 2015 to 17.12 billion pieces in 2020, which in turn led to an increase in plastic packaging consumption (waste) from 57,000 tons in 2015 to 574,000 tons in 2020, a nine-fold increase in five years. The whole life cycle of takeaway plastic packaging has a great impact on the environment. From 2015 to 2020, the cumulative carbon footprint of takeaway plastic packaging was 7.71 million tons of carbon dioxide, of which 1.7528 million tons of carbon dioxide were emitted during the treatment stage.

 4. New microbes can "eat" most plastics at low temperatures

  Swiss scientists have reportedly discovered a new "cold-adapted microbe" that can break down and digest different types of plastic at low temperatures. The discovery is the first step in the scientists' development of a more cost-effective method of breaking down plastics on an industrial scale, which they hope will eventually eliminate plastic pollution from the planet.

  At present, the microbes that have been discovered in the field of scientific research that can decompose plastics usually need to be effective at temperatures above 30°C.

  In the new experiment, more than half (56%) of the strains, 11 fungi and 8 bacteria, digested PUR, and 14 fungi and 3 bacteria digested PBAT and PLA at a temperature of 15 °C. But none of the microorganisms were able to digest PE during the 126-day culture period.