In the past half month or so, the domestic plastics raw material market continues to rise, and the price of polypropylene granular material is breaking through the high level in the past four years. However, the market is rapidly rising, and can the action in the late market last?

The main factors for this rise are the following. First of all, the supply side is tighter. This spring, the centralized maintenance of the plant is obviously stronger than in previous years. At the same time, the centralized maintenance is over. After that, some of the devices have entered the maintenance follow-up one after another. The relative time of the equipment maintenance season is prolonged, the pressure of the supply side is not large, and the pressure of petrochemical inventory is gradually reduced to support the market.

Secondly, the demand side has improved relatively, and the national ban on importing waste plastics was implemented during the year, while the downstream demand for imported waste plastics has gradually shifted to new materials. According to Zhongyu Information Statistics, the output of domestic general materials in the first half of 2018 increased by 9.69% annually compared with the first half of last year. Demand has changed for the better, driving the market.

Thirdly, in addition to the relative improvement in the supply side, the short-term good news stimulus is also coming. On the macro level, the central bank directional drainage, the coal chemical plant overhaul in early August on the supply side, and the shutdown of the power-limiting powder plant in summer all bring upward momentum to the market.

At present, due to the impact of the continued rise of futures, some of the merchants'supply is locked in the market, resulting in tight market supply, which also brings fundamental support to the upstream of futures. At present, however, Petrochemical inventory is still higher than the same period last year, while the main factors affecting prices will return to the supply and demand level, and demand will eventually return to the terminal enterprises.

Influenced by the high price of raw materials, the conflict mentality of downstream enterprises has increased, some enterprises have reduced their production load, and even some downstream enterprises in some areas have indicated that they will enter the holidays after clearing the stock of raw materials. In the context of recent trade frictions escalation, the export of plastic products has been blocked, while terminal demand is difficult to support the sharp rise in raw materials. It is expected that the current market lacks high-level support momentum, and we need to guard against the possibility of rapid price recovery after the change of supply and demand expectations.