N95 mask is popular in domestic market, the expansion of production capacity stirs up the industrial chain. PP market will face great changes?
PP
Polypropylene (PP), as one of the fivegeneral plastics in China, is widely used. Plastic woven bags, films on theoutside of packaging materials, masks, non-woven protective clothing, wavebuckets inside washing machines, and car bumpers are all made of polypropylene.
It is precisely because of the wide rangeof applications of polypropylene (PP) that it has a huge demand for use everyyear. There is demand, there is supply. With China becoming a world factory,the demand for polypropylene capacity expansion is obvious.
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It is understood that at the beginning of2022, the planned new capacity of the industry statistics is about 7.35 milliontons. Up to now, 2.8 million tons have been put into production in the firsthalf of the year and 1.8 million tons in the second half of the year. Comparedwith the production capacity in 2021, the growth rate is 14.69%. In terms ofgrowth rate, it is 11.9% higher than the average growth rate of polypropyleneplants in the last 10 years, and 13.1% higher than the average productioncapacity growth rate in the last 5 years.
20231090PP
At present, there will be 10.9 million tons PPcapacity waiting to be released in 2023. Domestic competition is becomingincreasingly fierce, which also inhibits the rise of market prices.
"From the time of production next year, there will be alarge amount of new supply in the market after the Spring Festival, especiallythe fierce competition in the price of general materials. In addition, theoverall operating rate of the downstream is low around the Spring Festival, sothe overall pressure in the first quarter is large, and the price is difficultto show a bright performance." Teng Meixia said that, for the industry,the industry's capacity utilization rate will decline in the future, and it isexpected that the overall polypropylene (PP) production growth rate will belower than the capacity growth rate.
"Due to the rapid expansion of theproduction capacity of polypropylene(PP), the sales of polypropylene(PP) mayface certain price pressure. From the perspective of spot trade, spot saleswill be more regional. From the perspective of technology, the sales pressureof polypropylene generic materials will increase. Polypropylene manufacturersmay choose to produce some more profitable brand segments to cope with marketcompetition." Lu Jiaming said.
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