The high risk of plastic base differential repair increases
The high risk of plastic base differential repair increases
After entering the second quarter, plastic futures (LLDPE) strong, futures prices rose, rose by more than 500 yuan/ton, completely cast off the yoke of the demand of season, a trend of "off-season not light". The author believes that the factors that rise in April are different from recent ones. Recent gains have come more from the basis than the fundamentals.
For LLDPE, the author thinks that, from the beginning of the April market main body of the logic lies in the equipment maintenance and weakening demand in the game, the futures price and spreads across the month under the game overall moving up, as a typical strong market in recent months. At this stage, the petrochemical equipment has been overhauled. According to the author of the track, there are 5 sets of equipment maintenance, respectively, Shanghai secco, dushanzi petrochemical, yangzi petrochemical, baotou shenhua, zhongyuan petrochemical, the total capacity of up to 1.19 million tons, more than 20% of domestic production capacity. Four of these have been serviced, and two have resumed production in mid-may. The six sets of devices cost 4.74 million tons in April. In addition, the addition of the shenhua device has resulted in a larger reduction in April than in March, which has been confirmed by the reported domestic production data in April (38.24 million tons). The author believes that this is one of the biggest factors of LLDPE's strength in April.
After entering may, the basic theme logic still lies in device overhaul and demand weakening, but the basic support strength is significantly weaker than in April. On the one hand, the maintenance is weakened.
In may, three sets of equipment were overhauled, and the anhylitization in the township was expected to start from May 20, with an estimated loss of 12,500 tons in May. Zhongyuan petrochemical co., which has been in maintenance for six days starting from May 8, estimated the loss may be 0.33 million tons in May. China's tianjin municipality began servicing 10 days on May 6, with an estimated loss of 0.83 million tons in May. The three sets of devices will add a total of 2.41 million tons of new production in May. But judging from the reproduction of the repair unit in April, we expect to return at least 410,000 to 420,000 tons of new capacity in May.
On the other hand, the agricultural film will enter the absolute off-season, the demand of the film is finished, the demand of the canopy film has not been expanded, and the short-term canopy film cannot make up for the gap caused by the weak demand of the film. The author predicts that the fall in agricultural film demand will be around 20,000 tons in May. Thus, fundamental weakness becomes a big probability event.
But the market and the fundamentals have clearly diverge. The author thinks that the main reason is the base difference factor. Since the end of April, 1409 contracts have reached 800 yuan/ton from the spot base. According to the statistics, the probability of the base difference of more than 800 yuan/ton is less than 5%, and the probability of falling within the range of RMB 400 to 500 yuan is the largest. Therefore, the base difference was on the high side, and repair became a necessary way. After entering mid to late may, basis fast convergence, the current spot market the lowest price is in 10550 yuan/ton, the futures price is highest reached 10410 yuan/ton, the lowest basis for futures premium only 140 yuan/ton, it also belongs to the futures premium rate in nearly two years the lower level. The gradual repair of the base differential has greatly released the risk of shorting, and recently the futures price has risen, and the current linkage is not obvious. I think this is likely to be the turning point of LLDPE in the near future. As the base risk is released, the power of short - term short - line shorting will be returned.
Taken together, the author believes that, given the seasonal demand of LLDPE, the price has the demand of callback on the base level. The demand for the adjustment of the disk has been further strengthened with the convergence of the base gap in the late September. As a result, the risk of a pullback is increasing
