I believe many of my friends have been attracted by people selling masks, meltblown cloth, machines, and PP on their WeChat Moments over the weekend. I am the same. Even my fitness instructor has posted on WeChat Moments selling PP. You can see this. How crazy. Affected by the epidemic, the market demand for masks and protective clothing has surged. Underground mask industry chains have emerged in many places, and every household has begun to produce masks and melt-blown cloth.
In early April, my friend also wanted to make meltblown cloth. I learned through him that The “meltblown cloth” produced by PP Secco s2040 priced at 17,000 yuan/ton is priced at as high as 400,000 yuan/ton. Facing such huge profit opportunities, there are more and more participants, and more and more people are hoarding goods. , Secco’s s2040 was even sold for 50,000 yuan/ton over the weekend, and it was still cash withdrawal.
The futures market hit the daily limit on the 13th. In the spot market, under the influence of futures, the price of upstream propylene has surged, boosting the mentality of industry players. The surge in fiber materials has driven other varieties to increase ex-factory prices. Last weekend, the propylene market price in Shandong continued to surge, and the price rose again in a single day. Prices generally exceed 1,000 yuan/ton, an increase of 35.02%, and some companies have even increased by 5,000 yuan/ton, an increase of nearly 100%. Amid market speculation, traders’ quotations continued to rise.
But the PP traded in our futures market is not this kind of fiber material, so why can it reach the daily limit?
From the perspective of inter-temporal price difference, the price difference of PP05-09 has been much higher than the historical level of the same period. The current price difference between 05-09 is about 838 yuan/ton, while the historical price difference during the same period is basically below 400 yuan/ton. Judging from the intertemporal price difference, the recent month is far higher than the far month, and the market is heavily hyped.
And the source of all the hype is all because of “masks.” The market is still in short supply and the over-construction of mask factories is also a direct factor in the increase in raw material prices.
According to Qichacha data, there are more than 5,000 mask manufacturers nationwide. Since the outbreak, many companies have switched to mask production, making it difficult to purchase materials.
Tang Kexin, deputy director of the Legal Supervision Division of the Price Supervision and Competition Bureau of the State Administration for Market Regulation, said in an interview with CCTV: Lawless elements are driving up prices, causing confusion in market price signals and causing disruption to downstream manufacturers. The situation caused great panic, and manufacturers had to buy meltblown cloth.
In addition, the spread of the international epidemic has also given middlemen a reason to increase prices.
A well-known medical device supply chain manager in Beijing said that the current international epidemic has strained the relationship between supply and demand, and exports have become an important part of the business. This is also the main reason why the price of meltblown cloth has increased. , foreign markets are in short supply.
On April 5, the official Weibo account of the State Administration of Customs stated that the U.S. FDA issued a document on its official website stating that masks produced in China that have not obtained NIOSH certification have obtained EUA authorization.
This means that KN95 masks produced in accordance with Chinese standards have been officially recognized by the United States. At present, many regions such as the European Union and the United States have accepted the import of Chinese materials and are temporarily exempt from tariffs. At present, profits in the domestic market have become smaller, but there is still a large gap in the international market.
Since the core of masks with protective properties is melt-blown cloth, and melt-blown cloth is limited by various factors, resulting in its production capacity being unable to expand rapidly and significantly, and its price remains high. Recently, it has been Maintaining at a high level of 350,000 to 500,000 yuan/ton, against this background, the hype in the mask industry chain has caused abnormal and violent fluctuations in raw material prices, and the risks cannot be underestimated.
From a supply and demand perspective, as the demand for PP fiber materials expands, manufacturers of inferior meltblown cloth turn to large quantities of purchases PP drawing replaces PP fiber, which further tightens PP drawing and prices soar. At the same time, the skyrocketing price of fiber has caused PP manufacturers to switch to fiber production, which has squeezed out the drawing production rate and driven the price of drawing to skyrocket.
Since the beginning of the month, the fiber production schedule has increased from 3% to 26%, and the drawing production rate has dropped from 30% to 20%. I heard that several units will be converted to production this weekend. The fiber production rate is expected to rise to about 35%. The PP of this wire drawing machine is the delivery product of Dalian Commodity Exchange’s polypropylene.
Because manufacturers of PP gradually discovered this market demand, they switched to fiber materials, reducing the cost of drawing. Schedule production. At the same time, the demand for raw material propylene has increased, and propylene manufacturers have continued to increase prices. Propylene prices have increased by 1,300 yuan/ton over the weekend, an increase of 22%, which has also added fuel to the rise of PP. To sum up, the prevalence of “fake masks” has led to malicious speculation in the market. In the long term, domestic PP production capacity is still in the stage of oversupply. The short-term shortage of fiber materials can be solved by changing production.
However, while PP is skyrocketing, the profits of downstream industries other than fiber have been rapidly compressed due to the surge in raw materials, which has become a subsequent obvious negative. In addition, the fiber market outlook – The price difference of drawing has been restored to the normal level. Recently, the price difference between the two has narrowed. After the device is switched back to drawing, the difference of standard products is obvious.Increase will also put pressure on market prices.
On the other hand, the operating load of some downstream factories is still lower than the same period in previous years. Affected by overseas public health events, the pressure on export orders is still there. Fiber materials only support the market in the short term. In the long term, global economic development and whether the OPEC+ meeting reaches an agreement to reduce production are the key factors that determine the trend of PP.
Supply and demand expectations are also changing. But after every madness, there is always a mess, and I believe this time is no exception. </p
