After the National Day holiday, the plastic ** price jumped directly below 10,000 points, continuing the pre-holiday weak market. In mid-October, although the plastic price remained low and volatile, the overall weaker short-term trend has not yet come to an end.

First of all, the international oil price was successively low and the cost support was defeated. Before the sharp drop in crude oil, it experienced a period of more than one year of shocks and climbs. In particular, since 2014, the fluctuation range of oil prices has been stable and at a relatively high level. As a result, the impact on downstream industries has been relatively weakened. However, after the acceleration of the decline in prices since September, the entire crude oil-related industry has not circumvented this key factor in avoiding cost support. During the eleven long holidays in China, the external oil price fell sharply, accelerating the fall after the plastics festival. The current oil price has fallen below 80 US dollars, which is the lowest level in the past four years. There is no doubt that it has entered a bear market stage, and its impact on downstream industries will follow.

Second, spot prices continue to report low. In the multi-week period after the holiday, the domestic plastic spot price dropped by more than 100 yuan/ton. As for the monthly average price in September, the price of 10,800 yuan has fallen by more than 5% from August, and prices have fallen a lot in the first half of October. It is expected that the decline will still be larger this month. Sinopec and PetroChina’s control of prices has clearly eased in the nine stages of gold, nine and silver. The current price decline is also basically synchronized, which is enough to explain the market's pessimism. From our statistics on the market price of Yangzi Petrochemical in Nanjing, the current price spread has been expanded to an extreme value of 1,000 points. There is room for improvement in the spread, but with the weak market, it is expected that the spot price will decline to follow the price.

Third, the inventory pressure is prominent and the starting load is high. As of October 14th, the statistics of polyethylene social inventories increased by more than 40,000 tons from the previous month's 30th, an increase of 10.57%. The accumulation of inventory has a part of the impact of the Golden Week holiday, but more is the result of the limited purchase of downstream end customers and the consequences of insufficient demand. The current backlog of petrochemical inventories is relatively serious, especially in North China. Because the market is sluggish, traders do not dare to pick up the goods. Inventory pressure is so prominent, but the operating rate of petrochemical plants has been increasing. The latest data shows that the domestic polyethylene plant operating rate has reached a peak of 91%.

In the end, the maintenance of domestic installations in October has been significantly reduced. Except for the continuous parking of several old devices, the overhaul mainly focused on coal-to-olefin devices. Baotou Shenhua, Yanchang Coal, and Shaanxi Yulin are the three main production lines for the four coal-to-olefins plants in China, and the total supply of about 40,000 tons is reduced. It seems that centralized maintenance has a certain positive effect on the market, but coal-based products are not mainstream products, and the current pressure on the environment of plastics is still relatively heavy, and it is expected that the boosting effect will be limited. In addition, entering the fourth quarter did not usher in an effective turnaround, apparently the lack of downstream demand stimulation, and in the current macroeconomic downturn, crude oil prices continue to hit a new low, the plastic price is also difficult to have outstanding performance.