Plastic rally will turn to a strong concussion phase

The plastics market has entered a new phase, shifting from a rebound driven by tight supply-demand dynamics and suppressed crude oil prices into a period of strong oscillations. As December began, the chemical sector experienced a general price rise, reversing the earlier weakness, with plastics leading the recovery. However, in recent days, plastic prices have declined steadily, with the main contract recording three consecutive negative sessions, barely holding above the 10-day moving average. On the 13th, the Federal Reserve’s announcement of the fourth round of quantitative easing (QE4) did not surprise the market. Major commodities like crude oil and gold saw sharp declines, reflecting market skepticism about the effectiveness of the policy. While QE4 aims to purchase long-term Treasury bonds and extend the Fed's bond portfolio duration to lower long-term yields—similar to previous operations—the $45 billion scale is unlikely to inject significant liquidity. Still, the market reacted strongly, showing that investors remain sensitive to monetary policy shifts. Crude oil, despite the supportive stance of QE, has seen diminishing returns from the policy. The real drivers of its price movement are still its own fundamentals and the ongoing fiscal cliff negotiations. OPEC maintained its output at 30 million barrels per day, meeting expectations, but global demand hasn’t recovered much. Meanwhile, U.S. production has surged, supported by the end of refinery maintenance and increased output from Sudan and South Sudan. This has kept the supply-demand balance loose, limiting short-term upward momentum for oil. Although the fiscal cliff remains unresolved, we believe an agreement will eventually be reached. Since last year’s record high plastic inventory and this year’s planned new capacity, the market has been bearish. Current price structures show a long-term inverted curve, with downstream sectors cautious and only purchasing small quantities. This has led to a general destocking trend. Despite the pessimistic sentiment, there hasn’t been a significant drop in actual demand. Additionally, government policies to reduce petrochemical output have delayed some new projects. Social stock levels have remained extremely low, with most months showing a situation where supply was less than demand, though this wasn’t fully reflected due to light inventory practices. The Daqing plant accident caused a supply gap of around 100,000 tons. While the Qilu and Fushun projects will gradually increase supply, the pressure will ease. However, the psychological impact of the accident on the market has been more significant. Long-suppressed bulls now have an outlet, which may have triggered the recent market rally. With the northeastern region entering the traditional agricultural film season, downstream processors are preparing for production, further tightening the market. Although prices have risen in the short term, agricultural film demand is relatively inelastic, meaning purchases won’t drop significantly due to price increases. We expect the supply-demand imbalance to intensify as production preparation begins. In recent months, LLDPE prices have rebounded above 11,000 yuan, nearly matching current spot prices. However, the spot market remains calm, with low-priced supplies being sought after while high-priced ones are ignored. There’s no clear sign of price hikes. The spot market performance has also slowed the price ascent. With the coming of the reserve season, spot prices may still rise slowly, but a rapid recovery seems unlikely. Overall, the current factors affecting LLDPE are clear, and the supply-demand contradiction will dominate in the near future. Under weak crude oil prices and narrowed basis spreads, LLDPE is likely to remain in a strong bias phase. As long as prices stay above the 60-day moving average, long positions can be absorbed by bullish forces. If they fall below, the market may shift into a range-bound fluctuation.

Biochemical Incubator

Biochemical Incubator is suitable for scientific research institutions, colleges and universities, production units or department laboratories of environmental protection, health and epidemic prevention, drug inspection, agriculture, livestock, aquatic products and other industries as important test equipment. It is a special constant temperature equipment for water analysis and BOD determination, cultivation, preservation, plant cultivation and breeding test of bacteria, mold and microorganism

Mould incubator,Intelligent biochemical incubator,Biochemical incubator

Zenith Lab (Jiangsu) Co.,Ltd , https://www.zenithlabo.com