Plastics pulled back in early June and then remained strong. At present, crude oil remains relatively strong, and downstream demand is gradually increasing. In addition, the second round of domestic equipment overhaul is approaching, and tight supply will support plastic prices. Regarding the later trend, the author is more optimistic that the rise of plastics has been established.

Crude oil remains relatively strong

Although crude oil production in the wildfire area of Canada is gradually recovering, at least 400,000 barrels of daily average production capacity has not yet been recovered. On June 7, the monthly short-term energy outlook report released by the U.S. Energy Information Administration showed that the global crude oil demand growth forecast for 2016 was raised by 20,000 barrels / day, a year-on-year increase of 1.45 million barrels / day; the 2017 global crude oil demand growth forecast It is reduced by 70,000 barrels per day, a year-on-year increase of 1.47 million barrels per day. The report also raised the 2016 US crude oil demand growth estimate from the previous 140,000 barrels / day to 220,000 barrels / day, and reduced the 2017 US crude oil demand growth from the previous 120,000 barrels / day to 60,000 barrels / day. .

At present, Nigeria ’s crude oil supply has been reduced due to armed attacks, and Canada ’s production capacity has not been fully restored. There is some support for crude oil supply. In addition, the monthly short-term energy outlook report released by the US Energy Information Administration has raised global crude oil demand, prompting crude oil Prices remain strong. In addition, the peak season for crude oil consumption is starting, which will also support oil prices. Crude oil is the most upstream raw material for plastics. The relative strength of crude oil will play a certain cost support role for plastics.

Tight supply to support prices

According to past experience, the second round of equipment overhaul in China will usher in July-August. This year, Zhongsha Tianjin, Tianjin United, Lanzhou Petrochemical, Yanyu Yulin Nenghua, Pucheng Clean Energy Chemical and other units will enter overhaul. By then, tighter supply will play a role in boosting plastic prices.

At the same time, as the G20 summit is getting closer and closer, discussions in the industry about the impact of the summit on the polyolefin industry have become increasingly hot. As some downstream factories require mixed production of multiple raw materials, affected by the linkage of related raw materials, some factories have the intention to prepare goods in advance, and during the G20 summit, road control is expected to be implemented. In order to ensure timely and smooth transportation of goods, procurement needs to be made in advance. This is undoubtedly good for the polyolefin industry.

Downstream demand is gradually increasing

On the whole, under the background of the relatively strong crude oil, tight plastic supply and gradually increasing downstream demand, the rise of plastics has been established. Multiple orders can be established in operation, below the 5-day moving average stop loss, if the 60-day moving average is exceeded, long positions can be added.