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1. Price Trend analysis of polypropylene spot market in China during 2018-2022

In 2022, the average price of polypropylene is 8468 yuan/ton, the highest point is 9600 yuan/ton, and the lowest point is 7850 yuan/ton. The core fluctuation in the first half of the year was the disturbance of crude oil and the epidemic. The war between Russia and Ukraine switched between tension and relief, bringing great uncertainty to crude oil. With the price of raw material rising to the new high in 2014, the operation pressure of polypropylene production enterprises rose suddenly, and the situation of upstream and downstream losses occurred simultaneously. Oil prices become a crucial short-term watch. However, in March and April, the domestic epidemic broke out in a scattered fashion in the eastern coast, leading to a sharp drop in domestic demand, while the energy price remained high. After the price fall, the valuation end support was strengthened, and the petrochemical industry was overhauled in advance, and then the market stopped falling. The third quarter running interval between 7850-8200 yuan/ton, small amplitude. The beginning of the fourth quarter showed an obvious momentum of pulling up, with the continuous rise of crude oil, the downstream inventory is low in urgent need of replenishment, transaction volume, but the peak season support still needs to be verified. However, the impact of the epidemic combined with the poor performance of external demand, the demand side has formed an obvious pressure on the price, and the transaction is difficult to support. At the same time, the pressure above the current position of crude oil is relatively large, the cost side support is not unbreakable, the market trading sentiment turned negative, and the spot stopped rising and turned down. In the second half of the year, crude oil sustained shock weak, and domestic macro policy is still to prevent risk, peak season did not see significant improvement in demand, so the fourth quarter domestic macro, crude oil weak, and supply and demand resonance polypropylene to maintain downward operation.

2. Comparative analysis of production cost and net profit of polypropylene industry in 2022

In 2022, the profit of PP from other raw material sources except coal decreased to varying degrees. In the first half of the year, the profit of coal PP turned to profit because the cost increase was lower than the spot increase. However, since then, the downstream demand of PP continued to be weak, and the price rose weakly, the profit returned to negative again. As of the end of October, the profits of the five major raw material sources were all in the red. The average profit of oil production PP is -1727 yuan/ton, the average annual profit of coal production PP is -93 yuan/ton, the average annual cost of methanol production PP is -1174 yuan/ton, the average annual cost of propylene production PP is -263 yuan/ton, the average annual cost of propane dehydrogenation PP is -744 yuan/ton, and the profit difference between oil production and coal production PP is -1633 yuan/ton.

3. Trend analysis of global capacity and supply structure volatility during 2018-2022

In recent years, the global polypropylene capacity has maintained a steady growth trend, with an annual compound growth rate of 6.03% in 2018-2022. By 2022, the global polypropylene production capacity will reach 107,334,000 tons, an increase of 4.40% compared to 2021. In phases, the production capacity grew slowly in 2018-2019. In the fourth quarter of 2018, the escalation of trade disputes hit the global economy, and the pace of polypropylene production slowed down. From 2019 to 2021, the annual output growth rate is relatively rapid. The rapid growth of production capacity in this period mainly relies on the rapid development of China’s economy, and the demand growth accelerates the pace of capacity expansion. Millions of new polypropylene installations are added annually. From 2021 to 2022, production capacity growth will slow down. In this period, due to the influence of multiple negative factors such as geopolitics, macroeconomic pressure, cost pressure and continued weak downstream demand, the polypropylene industry will suffer serious long-term losses due to profit squeeze, which significantly slows down the global production pace of polypropylene.

4. Analysis of consumption and change trend of polypropylene industry in China in 2022

There are many downstream industries of polypropylene. From the perspective of the downstream consumption structure of polypropylene in 2022, the downstream consumption accounts for a large proportion of products mainly in drawing, low melting copolymerization and homophobic injection molding. The top three products in terms of consumption account for 52% of the total consumption of polypropylene in 2022. The main application fields of wire drawing are plastic knitting, net rope, fishing net, etc., which is the largest downstream application field of polypropylene at present, accounting for 32% of the total consumption of polypropylene. Followed by thin-wall injection molding, high fusion fiber, high fusion copolymerization, respectively accounted for 7%, 6%, 6% of the total downstream consumption of polypropylene in 2022. In 2022, due to the constraints of inflation, domestic production enterprises will face the impact of imported inflation, and the phenomenon of high costs and low profits will become prominent, restricting the orders of enterprises.