In July, the upstream and downstream differentiation of rubber and plastic products, polyolefin prices took advantage of the situation.

In July, the value added of industries above designated size increased by 3.7 per cent in real terms year-on-year (the growth rate of value added is the real growth rate excluding price factors), not only lower than the previous value of 4.4 per cent, but also lower than the expected 4.6 per cent, reflecting insufficient internal and external demand. From a month-on-month perspective, in July, the added value of industries above designated size increased by 0.01 over the previous month. From January to July, the added value of industries above designated size increased by 3.8 percent year-on-year. In terms of industries, in July, 23 of the 41 major industries maintained year-on-year growth in added value. The coal mining and washing industry grew by 0.4 per cent, the oil and gas mining industry by 4.2 per cent, the chemical raw materials and chemical products manufacturing industry by 9.8 per cent, the automobile manufacturing industry by 6.2 per cent, the electrical machinery and equipment manufacturing industry by 10.6 per cent, the computer, communications and other electronic equipment manufacturing industry by 0.7 per cent, and the rubber and plastics manufacturing industry by 3.6 per cent.

In July, the chemical raw materials and chemical products manufacturing industry, rubber and plastic manufacturing industry maintained growth, but the growth rate between the two was somewhat differentiated. After rising for more than two consecutive months, the price of polyolefin fell back in early August with the high level of crude oil. At the same time, the main contract changed months. Under the back structure between the near and far months, the main force rose after the completion of the month change.

The boom in the chemical raw materials and products industry continues to decline. The rubber and plastic products industry is steadily improving.

Judging from the growth rate of the added value of the chemical raw materials and products industry, since September 2022, the overall trend has continued to decline. The 2023 low of 3.9 in May, 9.9 in June and 9.8 in July also corresponds to the bottom valley of polyolefin prices in May. The July data looked at a marked marginal slowdown. But the cumulative growth rate has remained negative, indicating that demand is still insufficient this year.

In July 2023, the industrial added value of the rubber and plastics manufacturing industry increased by 3.6 year-on-year, an increase of 0.6 percentage points from the previous month. Negative growth for most of 2022, improved significantly this year, and remained positive and stable between the beginning of the year. The downstream home appliance manufacturing industry is in good shape, maintaining a double-digit positive growth rate. The performance of automobiles in the first four months of the year was the same as that of the home appliance manufacturing industry, and the growth rate slowed down significantly in June and July.

In 2023, the growth rate of industrial value added in the rubber and plastic manufacturing industry was significantly lower than that in the chemical raw materials and products industry. The difference in monthly growth rates is a sustained marginal improvement after reaching -18.3 per cent in December 2022. During the year, the price of polyolefin raw materials continued to decline, which played a certain role in the improvement of downstream profits, and the production enthusiasm of the rubber and plastic manufacturing industry increased. In July, the rubber and plastic manufacturing industry expanded by 3.6 percentage points, while the chemical raw materials and products industry shrank by 1 percentage point. The differentiation of the two trends reflects that the obvious demand for rubber and plastic products shows signs of improvement, and the difference between the two goes up.

Since 2023, the delivery value of industrial exports has been lower than that of the same period last year for seven consecutive months, and there is no sign of improvement. The export delivery value of rubber and plastic manufacturing industry has maintained a negative growth rate since December last year. Under the interest rate hike cycle in Europe and the United States, curbing inflation has become a top priority, and domestic exports of rubber and plastic products continue to be weak. In addition, the export delivery value of the automobile and home appliance manufacturing industry performed well. From January to May, the cumulative growth rate of the automobile export delivery value reached 43.4, and the home appliance manufacturing industry reached 10.3. However, in June and July, the export delivery value of the home appliance manufacturing industry continued to grow at a negative rate, while the automobile manufacturing industry slowed significantly at the margin.

What is the price trend of polyolefin raw materials from the perspective of industrial value added?

In terms of changes in the price of polyolefin raw materials, it is highly correlated with the trend of value added in the chemical manufacturing industry, and the trend is basically synchronized. The time of bottom and top inflection point is basically the same. Therefore, the value added of the chemical manufacturing industry can be used as a reference for the price trend of polyolefins.

From the perspective of the value-added trend of the rubber and plastic manufacturing industry in July, the rubber and plastic manufacturing industry is still recovering and improving steadily. At the same time, the margins of the chemical raw materials and products manufacturing industry are slightly weaker, and the two are divided, which is more conducive to the improvement of the terminal. Among them, automobiles and home appliances performed well. Not only did the domestic economy rise significantly, maintaining a double-digit positive growth rate, but exports were also very good, maintaining a large export growth rate. Although automobile exports slowed down slightly, the growth rate was still low. Polyolefin prices rose for more than two consecutive months. In early August, the short term fluctuated back down with the high level of crude oil. At the same time, the main contract changed the month. Under the back structure between the near and far months, the main contract changed the month and took advantage of the situation to rise after the completion of the month. In particular, polypropylene broke through the former resistance level at one stroke, and the medium and long term polyolefin will still rise.