Market Review:
This week, the domestic propylene market showed a strong unilateral upward trend. According to monitoring data, as of April 8th, the benchmark price of propylene has risen to 9591.00 yuan/ton, an increase of 9.18% compared to 8784.33 yuan/ton at the beginning of this week. The price not only broke through the previous platform, but also approached the historical peak within a year (9701.00 yuan/ton).
Market analysis:
1. Strong trend: From the multi cycle moving average chart, it can be seen that the price line runs steadily above all short-term (10 day), medium-term (20 day, 30 day), and long-term (60 day) moving averages, and each moving average is in a bullish divergent arrangement, indicating a clear upward trend in the market and sufficient momentum.
2. High risk location: Data shows that the current price has been at a “high” statistical position within one year. From the daily position tracking table, it can be seen that since April 3rd, the “10 day position” and “20 day position” of propylene prices have entered the “high” range and continuously triggered the “super rise” warning, indicating that the price has reached a high-risk range in the short, medium, and long term dimensions.
3. Solid bottom and huge increase: Looking back at longer cycles, the production price in Shandong region reveals the starting point of this round of rise. Since late February, the price of propylene has started from a bottom of about 5841 yuan/ton, initiating the main upward trend. As of April 8th, the cumulative maximum increase has exceeded 72%. This week’s rise is a continuation and acceleration of this large-scale upward trend.
Core driving factors:
The stable support of downstream demand is the key to the upward trend of propylene prices in this round. The profit margin of major downstream products such as polypropylene (PP) is still acceptable, and the operating load is maintained. As of April 8th, the benchmark price of PP (wire drawing) in Shengyi Society was 9666.67 yuan/ton, an increase of 4.50% compared to the beginning of this month (9250.00 yuan/ton). Stable demand has been formed for the procurement of raw material propylene. At the same time, some upstream equipment maintenance has caused a slight tightness in the supply side, jointly pushing up the price of propylene.
Conclusion and Prediction:
Based on the comprehensive analysis of the spot trading method of the Business Society, the current propylene market exhibits typical characteristics of “strong trend and high position”. Although the upward trend is very strong, due to the fact that the price has been at an absolute high level (with extremely low position scores) in the short, medium, and long term, the system evaluates that the current situation does not meet the conditions for a “buying point”. This indicates that the market has accumulated a large number of profit opportunities, and the risk of technical correction is rapidly increasing.
Trend prediction: In the short term, there is a possibility of an inertial upward trend in propylene prices and a pre-test high (around 9700 yuan/ton). But we must be vigilant that any positive news or weak downstream acceptance may trigger drastic price fluctuations.
Risk Warning: The alarm for multiple cycles of “super inflation” has been triggered, and the price is at a statistically extreme high. The market sentiment has entered a frenzy stage, and chasing high risks is extremely risky. Suggest downstream enterprises to purchase according to their needs and avoid excessive stockpiling; Traders should pay attention to locking in profits and prevent the risk of rapid rebound after a surge.
Key focus: In the future, it is necessary to closely monitor the profitability and changes in production of downstream polypropylene and other products, as well as the dynamics of upstream propylene supply facilities. These will be key factors affecting whether propylene prices can remain stable at a high level or turn around.
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