The international oil price in April has increased for 13.5% then that of March, it has greatly risen 23% between the beginning and the end of April, which has created nearly the largest single month increment in recent six years.

Apart from the continued fall of the USD exchange rates and the unstable geographic state, factors that drive the increment of oil price also includes the first drop of stocks in the UScrude oil storage center, Cushing, for the recent 21 weeks.

Under the circumstances of prosperous development of the shale oil industry, plus the greatly increment in domestic crude oil production in the US, the stocks of crude oil of Cushing has created a new high, yet it first fell in April, which indicated a slowdown regarding the speedup of crude oil production.

Along with the speedup and slowdown of crude oil production in the US, it is at the same time welcoming a peak consumption season in late May, vehicle-driving would directly stimulate the rise of petrol consumption, this could probably become the major force that drives oil price to increase in the future.

1.2 Upstream Monomers – Hundreds respond to a single call

Figure 2: Upstream monomers SM&C3(Feb-Apr 2015)

Source: Chem99

Figure 3：Upstream monomers AN、BD（Feb-Apr 2015）

Source: Chem99

Table 2：SM、C3、AN、BD fluctuation(Mar-Apr2015)

	Mar 2015 average	Apr 2015 average	Apr Vs Mar 2015
SM	USD1114	USD1315	↑18.1%
C3	USD981	USD1003	↑2.2%
AN	USD 1494	USD 1430	↓4.3%
BD	USD 800	USD 968	↑21.1%

Styrene(SM) ↑18.1%

Reduction in supply has led to the increment of the SM market in April.

There are 7 sets of SM devices parking in Korea, reducing the production for 20.21 thousand tons, accounts 76% of outdated capacity of SM in Korea. Japan also has device overhaul, the accumulative outdated capacity of devices reached over 50 thousand tons in Japan and Korea.

At the moment Asia was focusing on device overhaul, a lot of sets of devices in Europe also parked and the price has increased to 35%. The US sources has arrived Europe, while the quantity for the Asia market was relatively reduced, which former a boost in the Asia market indirectly.

Propylene(C3)

↑2.2%

C3 in Asia has maintained an increasing force, apart from the support of crude oil, the rising demand has also pushed the price of C3.

C3 devices being overhauled were quite a lot in Asia in April, the production of C3 has reduced about 10 thousand tons in both Japan and Korea due to overhaul.

Under the background of “rich in coal, poor in oil”in China, the chemical products mainly rely on imports, about 80.5 thousand tons of C3 were imported from Korea, Japan and Taiwan in recent three months, imports of C3 is still highly demanded.

Acrylonitrile (AN) ↓4.3%

AN has dropped 4.3% in April, the poor demand of downstream parts derivative instruments market has built an obstruction towards AN.

The Acrylic has always been accounting for a higher portion in AN consumption, yet the growth of the acrylic market was not optimistic, products regarding the textile industry has dropped 6.34% in the first season this year.

Another major function of AN is to produce Acrylamide (AM), and it is used to produce Polyacrylamide (PAM), which is used for sewage treatment, mostly apply in July to September, the high temperature seasons; while the demand in April is flat.

Butadiene(BD) ↑21.1%

The price of BD has increased greatly for 21.1% than the previous month, tight supply and excellent demand were the leading factors.

The SamSung Total Device Scheme in Korea will overhaul until the end of May, YNCC will overhaul until mid-June. The outdated capacity has reduced 5.7 thousand tons in April.

The downstream compose rubber market feel-good has also facilitated the increasing price of BD, the BD rubber has increased 8.2% in April, which was one of the three increment since August, 2014.

Other than Acrylonitrile (AN) being reduced due to demand constraints, the performance of the remaining three types follow the oil price - hundreds respond to a single call, emerging rises in different extent.

1.3Plastic Raw Materials Market – Sustained Elevation

ABS

Figure 4：The Comparison of Spot price, Cost& Ex-factory price in an ABS market（Feb-Apr 2015）

Source: HK Traders

The cost of ABS in the graph is 0.6*SM (Styrene) +0.25*AN (Acrylonitrile) +0.15*BD (Butadiene) +US$300. It hasn’t included expenses like terminal handling charges.

Table 3：ABS fluctuation（Mar-Apr 2015）

	Mar 2015 average	Apr 2015 average	Apr Vs Mar 2015
ABS	USD 1597	USD1667	↑4.4%

The ABS followed along the chemical factory price to increase in April, which has risen 4.4% than the previous month as a whole.

The chemical factory price remained at the USD1720/MT level at the end of the month. At the same time, the production cost of ABS fell, but the market price was still stable and better, which reflected an obvious instruction of the factory price in this phase.

The factory price increased gradually, which implied that the chemical factory does not contain stocks stress. Plus, both the longer time in production quantity control and the circulating supply currently are few. What’s more, Qing Ming Festival and Easter Holiday were experienced in April, the traders were more cautious in preparing the stocks, which increased the tense atmosphere of supply. Facing the Labour’s Day at the end of the month, the downstream factories were preparing stocks as we with a high demand. All these factors together have maintained the increasing atmosphere of ABS in April.

GPPS

Figure5：The Comparison of Spot price, Cost& Ex-factory price in anGPPS market

（Feb-Apr 2015）

Source: HK Traders

The cost of GPPS in the graph is SM (Styrene) +US$120. It hasn’t included expenses like terminal handling charges.

Table 4：GPPS fluctuation（Mar-Apr 2015）

	Mar 2015 average		Apr 2015 average	Apr Vs Mar 2015
GPPS	USD 1189	USD 1260		↑5.9%

In April, GPPS was smooth and steady, the raw material SM has greatly increased by 18.1%. The chemical factory set a high leaving price due to pressure of costs and lack of stocks. The growth of GPPS has reached USD150 to USD1520/MT at the final opening quotation in a chemical factory in Taiwan in April. Such situation is rare.

The former opening price has already accumulated a larger growth, it is regarded as a high level when reaching the position of USD1520. Traders are being in a middle level that encounter supply in high costs, they are considering whether the market accepts such pricing of goods as well. And thus, they usually order goods conservatively, which has led to a vacuity of current goods supply in most of the trademarks.

Under the condition that the original trademark choices are relatively single in the market, supply cannot meet the demand of goods in stock, and therefore conducing an increasing price.

Figure 6：The Comparison of Spot price 、Cost& Ex-factory price in an HOMO PP market（Feb-Apr 2015）

Source: HK Traders

The cost of HOMO PP in the figure is calculated by C3 (Propylene) +US$120. It hasn’t included expenses like terminal handling charges.

Table 5：HOMO PP fluctuation（Mar-Apr 2015）

	Mar 2015 average	Apr 2015 average	Apr Vs Mar 2015
HOMO PP	USD 1271	USD1374	↑8.1%

PP was smooth and steady in recent three months, although C3, the monomers raw material, was stable in April, comparing with previous months, the price level of PP has been outreached for great distance in April.

Currently, chemical factories in Taiwan give priority to pay orders for early stage, which most of the trademarks stopped the quote in April; while a few that continued the quote has reduced receiving orders.

Goods in stock in the PP market are not much, which will be completely sold once offered, the date of delivery of a lot of stocks are mid- to late-May. Besides, it would be difficult to predict the date of delivery of dessert PP since Southeast Asia PP is the majority. In general, PP was steady and moving upward under the condition of tense supply.

Chapter 2: Plastic Market Forecast in May 2015

2.1 Imports of ABS/PS/PP

Figure 7：Type and capacity of import raw material in Southern China, East China and other regions (Jan-Mar 2015)

South China East China Other

Source: the Customs

According to the information of custom imports in the first season, PP refers to the major type of import raw material in Southern China, East China and other regions, indicating the large market demand of PP, which implied the supporting energy of the market price of PP was high.

Figure 8：Import raw material of traders and factories in Southern China region

(Jan-Mar 2015)

Traders Factories

Source: the Customs

Comparing the import capacity of the four major common types of plastics, factories were much better than traders, which indicated that the stocks traders hold are little, lacking flow and circulation of goods in stock in the market.

2.2 Global Economy – Optimism

Figure 9: PMI of China, the US and Eurozone（Jan-Apr 2015）

Source: Xinhua 08

＊China Official PMI- Jointly published by China Federation of Logistics & Purchasing and the National Bureau of Statistics

＊America ISM PMI- Published by the US Institute for Supply Management

China

PMI in the manufacturing industry in China was 50.1 in April, which was similar as the previous month. The two consecutive months are higher than the critical point.

Eurozone

The integrated PMI in Eurozone was 53.9 in April, created the new high for the 11 months. After the European Central Bank started QE (Quantitative Easing) policy this year, the economy is gently developing.

America

ISM PMI was 51.5 in April, which was similar as the previous month, as well as the lowest since May in 2013. This indicates the speed up level is relatively gentle in the manufacturing industry.

PMI in the manufacturing industries in China, the US and the Eurozone were stable and in an increasing trend, which reflected the general manufacturing industry is maintaining a growth in spite of no breakthrough in the market’s economic activities, the prospect of market is predicted as optimistic.

2.3 Forecast of Plastics Market

ABS

The traditional peak season begins in May, there is feel-good factor towards the demand of ABS raw material, yet, the growth of factory price of chemical factory was close to USD100 in April. When the market price reaches a certain level, most of the downstream factories would not be eager to purchase in a large quantity if they have prepared for part of the plastic raw material stocks.

Some of the toy industries expect they will enter the peak season continually in late-May since orders are just completed for Easter holiday. Some of the electronic industries would produce goods for the winter in summer, July and August are about the peak season, and the demand fluctuation would not be great in the following May. Some customers took pre-order the needed ABS for May under the condition that supply are becoming less continually, this would abate the burst size of demand of May in a certain extent.

The market price of ABS was close to the factory price of chemical factory at the position of USD1750, it still belonged to a relatively high price level in a short run. The market requires a certain period to adapt to this, it is expected ABS will be steady in May.

GPPS

The GPPS market is guided by the factory price of chemical factory in a large extent in May, chemical factory in Taiwan has greatly adjusted upward the factory price as USD150 to USD1520/MT during the last opening quotation in April, which the high cost restricted the capacity of receiving order of part of the downstream factories.

The major consumption market of DVD/CD cassette industry refers to countries in which property right is being strictly protected, namely Japan and the USA. The market is taking recession gradually due to the powerful network functioning and widely applicable electronic devices. Orders received by some customers are now being produced as both the cost of raw material and the price of order were low at that period, which caused difficulty to make a profit in purchasing materials and producing goods now.

A majority of plastic knives and forks industry is having close relationship with the tourism industry, plus, the date of delivery is relatively short. The production is smooth and efficient about one to two months before the peak season of traveling, the demand towards the corresponding raw material is great, the summer vacation is popular and prosperous in August and September, hence, the production of plastic knives and forks industry will be great during July. There would not be an obvious growth of production demand in May, it is expected the GPPS market in May will probably continue the tense atmosphere of supply in April, the entire month is seemingly stable.

It is a difficult task to buffer the situation, lacking of stocks, in the PP market in a short run, although the monomer C3 is increasing in a relatively gentle way, the major force that drives the increasing price of the current PP market is not the high cost, but the few supply due to frequent suspension or the cautious act of receiving orders of chemical factories.

A PP chemical factory in Taiwan is going to carry out annual repair for monomer and transparent PP production line during 25 May to 5 June, some of the trademarks will stop supply. In addition, restarting the machine does not represent to produce normally and immediately in general, it is estimated that the factory will successfully manufacture and provide goods in late-June. Supply of goods in the market will be on edge.

Along with the beginning of peak season in most of the traditional manufacturing industries, under the situation that the supporting demand of the PP market will be relatively great, while supply of goods will be few, it is expected that there is a small growth of PP in May.

Chapter 3:Summary–Place the order, Peace in mind

In the market quotation with tense supply of goods, the prior element of considering choices is to match up with the date of delivery of production instead of prices. Under such circumstances, goods in stock are being sought, however, wishes may not be fulfilled that often. Therefore, placing an order is a safe purchase mode, which better guarantees the production process.Place the order, peace in mind.

Chapter 4: Appendix-Major Plastics Event

9 April 2015 The monocyclic growth of crude oil storage is the biggest since March 2001, the international crude oil price dropped USD3.56, it was USD50.42 per tub, which created the greatest one-day decline in these two months.

14 April 2015 The quantity of oil well in the US has fallen for 18 weeks consecutively, which was the lowest since December 2010.

20 April 2015 The factory price of Chi Mei:

GPPS: USD1520/MT, rose USD150

HIPS: USD1640/MT, rose USD120

This growth is regarded as the first occurrence in recent ten years or so.

21 April 2015 The factory price of Taipei:

GPPS: USD1520/MT, rose USD150

HIPS: USD1590/MT, rose USD150

This growth is regarded as the first occurrence in recent ten years or so.

30 April 2015 The official announcement of crude oil stocks in the US has increased for 14 weeks consecutively; the stocks of Cushing first dropped in these 21 weeks; the futures of crude oil of Europe and America has risen to USD58.58 per tub, which is the highest point within the year.

Our Plastic Market Report is mainly to promote the market interactions among clients and provide reference information related to the market trend to clients. Also, we also pay attention to the communication and interaction between different enterprises. We welcome the enterprises which are interested in discussing the market to contact us and strive for promoting exchanges jointly. If you have any suggestions or queries, you are welcomed to contact us through:

Market Reports

Grow Beyond the Billows

Chapter 1: Plastic Market in April 2015

1.1 International Oil Price (WTI)–Rising gradually

1.2 Upstream Monomers – Hundreds respond to a single call

1.3Plastic Raw Materials Market – Sustained Elevation

Chapter 2: Plastic Market Forecast in May 2015

2.1 Imports of ABS/PS/PP

2.2 Global Economy – Optimism

2.3 Forecast of Plastics Market

Chapter 3:Summary–Place the order, Peace in mind

Chapter 4: Appendix-Major Plastics Event

SUNTA OVERVIEW

Virgin Plastics

Sustainable Plastics

ESG & Sustainability

PARTNERS

NEWS ROOM

INSPIRATION HUB

Contact Us