Nov PP Production Profits Failing to Improve Greatly
Crude Oil-to-PP Production Profit Analysis and Forecast
The average gross profit at crude oil-to-PP producers rose by 25.76% M-O-M to RMB 1,533/mt in October. The cost from crude oil-to-PP production increased by 9.35%, as the monthly average price of crude oil climbed by 13.42% to $84.49/bbl, but crude oil-based PP EXW prices rose more by 11.69%.
In November, the international crude oil prices will continue to rise, but the price fluctuation will enlarge. The overall supply-demand fundamentals will be relatively stable. With the international crude oil prices rising, the U.S. asks Saudi Arabia to raise crude oil production, and the uncertainties in the crude oil production cut conference will be large. Accordingly, fluctuations in the international crude oil prices will be large before the conference. PP prices are supposed to mainly move downwards in November, so the profits from crude oil-based PP production will stay largely stable or move within a range of RMB 500-700/mt.
Coal-to-PP Production Profit Analysis and Forecast
The average gross profit at coal-to-PP producers was RMB -3,063/mt in October, falling by 536.8% or RMB 2,582/mt M-O-M. The cost from coal-to-PP production rose by 15.12% M-O-M with steam coal prices staying high, while coal-based PP prices increased less by 11.00% M-O-M.
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