PP Weekly Report (China Area)

                                   (2004.07.05-2004.07.08)
                             Issue 1, 2004       Total Issues: 1

1.Market Summary:
　　The upward trend in PP prices remained in place firmly, the majority of granule yarn petrochemical enterprises increased ex-work prices by RMB 100-200/mt again. The sales kept stable with low stockpile state. The resources remained tight, pushed by the petrochemical enterprises'increasing ex-work prices continuously, the whole market prices in most areas went up by RMB 50-200/mt; In East and South China market, the dealing prices ranged between RMB 9100-9200/mt, higher than that in other areas. Especially in East China, the market rounds appeared active a little and better. Under the circumstance of the continuous rising of PP price and the tight electricity supply in south areas, the operating rates of downstream plants reduced and the demand shrank day by day, the market acted quietly and dealing volume was low on the whole. Some traders felt it necessary to play cautiously under the situation of the weak market presently. With the smooth sales and lower stockpile, most PP powder petrochemical producers increased ex-work prices by RMB 50-150/mt, while the exception was that the higher ex-work price in Nanjing Hongye was reduced by RMB 100/mt on Thursday. And the market prices of most areas went up by RMB 50-200/mt synchronously. PP injection quotation at China Main Port rose by USD 10, Propylene monomer were offered at USD 750, and the unconvinced report of over USD 760 was even heard in the market. This week, the crude oil price rose sharply, the weekly average prices of 10 types on July,7 was USD 35.55 per barrel, up by USD 1.96 per barrel.
2.Ex-work price(Updated 2004.07.08)
(RMB/MT)

3. Regional market prices(Updated 2004.07.08)
(RMB/mt)

4.Data Research:the weekly average price

　

5.Chart of all types

6. Prospect of next week
　　The supply and demand relation is relatively balanced for a short time. If there is no sudden events, China PP market is possible to maintain the stable and mild upward trend.
7. Comprehensive view of the market
　　This week, all types of PP products remained upward trend, the petrochemical enterprises had smooth sales and kept the limited inventories, the market acted lower deals under the circumstance of the tight supply. On one hand, some negative factors existed, such as the high PP products, tight electricity supply in south areas, high temperature weather, etc., the downstream demand shrunk further, on the other hand, the available supply would decline in near future due to the maintenance of some petrochemical enterprises, so the balance of supply and demand would remain in place basically. Influenced by this, some people in the circle think that the space of rising more still exist in the following days, however, a minority takes a pessimistic view of the current market state of the small trading volume and the rising price and thinks the price will go down a little in late July. Anyway, the focuses of the following market are the arrival of import resources, the state of downstream plants'operating, especially the sales of petrochemical enterprises.
The favourable factors:
　　First, the international crude oil prices rose sharply this week, the import resources of Propylene monomer and PP were offered more highly firmly; second, the amount of available resources decline within this month due to many shutdowns in petrochemical producers; finally, the whole resources still are short, and the inventories of petrochemical enterprises are rather low.
The unfavourable factors:
　　First, due to PP's high price, the hot weather as well as the tight electricity supply, etc., the operating rates of downstream plants lowered and the available demand shrank further; second, in the unseasonal demand period, the high cost restrained traders from participating actively, so the market sentiment was so quiet; thirdly, the tightened management of transportation decelerated the movement of resources and brought high transportation cost.