Plastic basis after repair high risk
Plastic basis after repair high risk
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 thinks that, with the recent rise in April factor is different, the recent rise more from the situation bad factors, rather than 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. In this phase, the large-scale petrochemical plant maintenance. 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. Among them, there are 4 sets of the repair is completed, and 2 sets of resume production in the middle of may. The six sets of device capacity loss caused by April of 47400 tons. In addition, with shenhua device switch, make larger reductions in April from march, it also released from domestic production data for April (382400 tons). The author thinks that, this is April LLDPE market strength is one of the biggest factors.
After entering may, fundamental subject logic still lies in the equipment maintenance and weakening demand, but compared with April, fundamentals supporting strength decreased significantly. On the one hand, overhaul wanes.
Enter may have 3 sets of equipment for maintenance, including zhenhai refining is scheduled to begin on May 20, from maintenance, estimated to 5 capacity of 12500 tons; Zhongyuan petrochemical since May 8 repair 6 days, estimated to 5 capacity of 03300 tons; Sand in tianjin from May 6, 10 days began to overhaul, estimated to 5 capacity of 08300 tons, the 3 sets of equipment will be a total of 5 new capacity loss of 24100 tons. But from April has repair device production, we may add capacity is expected to at least go back to the level of 410000 tons - 410000 tons.
River, on the other hand, will enter the off-season absolutely, membrane demand is all complete, films demand has not yet been launched, short films cannot make up for film demand gap caused by light. The author expects the river may decline in demand of around 20000 tons. Therefore, a weaker fundamentals become a big probability event.
But to the deviation of fundamentals appear in the market. The author thinks that the main reason from the situation factors. Since the end of April, 1409 contracts and spot basis reached 800 yuan/ton. According to statistics, the basis of more than 800 yuan/ton rate is less than 5%, to $400 - $500 range of maximum probability. Therefore, the basis is on the high side, repair become the only 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. Basis of the gradual repair the risk of shorting is greatly released, futures prices recently, now the linkage is not obvious. The author thinks that, it is likely to be the turning point of LLDPE in the near future. As basis risk release, late or short term bearish force will kill back.
Taken together, the author thinks that, given the LLDPE seasonal demand, the price is on the basic callback. And late September contract rose as the basis of convergence, disk adjustment needs further strengthened. Therefore, risk is stepping up its highs
