1、 Market Overview:
This week, the spot price of propylene remained at a high level. Although the daily price fell to 9591.00 yuan/ton on May 8th (a decrease of 2.21%), the overall price center has significantly increased compared to late April. The current price is 9591.00 yuan/ton, which is at a high level within a year.
Although the moving average price line has some twists and turns, it always relies on the moving average system to rise; Especially in early May, a wave of upward movement stabilized the price platform in the high range of 9400-9800 yuan/ton.
2、 Analysis of core indicators of Business Society Spot Connect:
1. Mean Deviation Index (Core):
The red 10 day moving average is currently running steadily above the blue 20 day moving average. This belongs to a typical “positive expansion” pattern, indicating that although there was a single day correction on May 8th, the short-term upward momentum is still abundant, and the bullish trend has not been disrupted.
2. Price Position Indicator (Auxiliary):
As of May 8th, propylene was at a “medium high” or “high” level during the 10 day, 20 day, 30 day, 60 day, and 90 day cycles. This indicates that the current market is in an absolute strong cycle, with strong downward support.
3、 Supply and demand fundamentals:
The fundamentals are bearish (with increased supply), but the technical aspects are bullish (with a positive widening of the spread). The resumption of maintenance equipment in May resulted in increased supply and weak demand. In theory, prices should decrease.
Why are prices still strong? Technical interpretation:
Cost support: Although supply has increased, the uncertainty of the geopolitical situation in the Middle East may be supporting raw material costs, leading to prices’ inability to fall ‘. The upward momentum from late April to early May was significant, and market sentiment has not yet been completely reversed by fundamentals. The decline on May 8th (-2.21%) currently appears more like a technical correction after a rapid rise, rather than a trend reversal.
4、 Price forecast:
1. Short term trend (next week): Strong oscillation, try to repair. Since the moving average is in the stage of “positive expansion”, it indicates that the upward trend is not yet complete. The decline on May 8th is likely due to short-term profit taking, with prices expected to gain support around 9500 yuan/ton and once again test the previous high of 9800 yuan/ton.
2. Medium term risk (next 2-3 weeks): It is necessary to closely monitor the emergence of “positive shrinkage” signals. Although it is currently expanding in a positive direction, the pressure of fundamental oversupply is real. If the price cannot break through the previous high of 9824.33 yuan/ton and the moving average begins to level, then the “positive expansion” will turn into a “positive contraction”, which is the true signal of peaking.
| http://www.thiourea.net |