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PP import supply prices are high to support the domestic market is difficult to fall

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Since the end of June, the RMB has depreciated sharply, and its declined range has exceeded the appreciation range of the US dollar index. From January to May this year, the RMB exchange rate remained stable overall, except for a slight depreciation in March, nevertheless it regained stability in April. In general, the RMB has risen a little in the stability. Since the late April, the US dollar index has become stronger, the RMB has contrarily depreciated slightly but remains stable generally, and therefore the range of depreciation is not large. However.since the late June, the RMB exchange rate has depreciated sharply, and the range of depreciation has exceeded that of appreciation of the US dollar index. The main reason for the recent weakening of the RMB is due to the strong rise of the US dollar index. On the one hand, the Fed is optimistic about the US economy, on the other hand, it is considered to prevent future inflation.
Therefore this is no doubt that there will be many interest rate hikes this year. In addition, concerns about future imports and exports triggered by Sino-US trade disputes also have an impact on the trend of exchange rate. Sources of data: The deterioration of the trade dispute situation of Jinlian and the approximation of critical time-points also triggered a large fluctuation in the RMB exchange rate.

The official announcement of the US tax collection list on June 15, China announced the counter-attack measures on June 16 and the subsequent threat from the United States. The sanctions quota will be further expanded by 200 billion dollars. The mutual sawing would finally cause the fluctuation in the foreign exchange market. With approaching of the US investment in China at the end of the month and the July 6 sanctions day, the worried mood in the market are reflected in the exchange rate of the RMB. The central bank’s structurally loose monetary policy is contrary to the direction of the US monetary policy, and the pressure on the depreciation of the RMB becomes further increased.

Data Source: Jinlian's sharp rise in the RMB has further increased rate also affects the price of domestic PP imported source materials. At present, the price of imported polypropylene is higher than domestic polypropylene by more than 1,200 Yuan/Ton, which is at a peak point in recent years. As the high-rising price of imported materials, it contrarily becomes the stronger support for domestic materials. In addition, due to the sharp increase in imported materials, the expected import volume of imported goods is expected to decrease, and the supply pressure of the market supply becomes relatively less. Therefore, although the PP market has been slightly affected by the weakening of the futures market, the declined range is expected to be limited. Meanwhile, some professional staff in the market expect there will be a certain increase in the PP market in the third quarter of the market.
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