According to the Commodity Market Analysis System of SunSirs, the domestic PP market was consolidating and operating at the end of May, with most brand products experiencing narrow price adjustments. As of May 27th, the mainstream offer price for wire drawing by domestic producers and traders is around 7,426.67 RMB/ton, a decrease of -0.74% compared to the price level at the beginning of May.

In terms of raw materials: The positive impact of many positive signals such as the suspension of tariffs released during the mid May US China talks still exists, coupled with the tense geopolitical situation in the Middle East and Eastern Europe, the risk of crude oil supply has increased, and prices have remained firm. At the same time, the decoupling of domestic propane trade is expected to gradually be lifted, and the cost pressure on PDH manufacturing enterprises may decrease in the future, but the differentiation of demand will hinder the growth rate. There is a certain degree of loose supply in the propylene sector, coupled with the basic end of pre holiday stocking, resulting in price fluctuations and downward adjustments. Overall, at the end of May, the prices of various PP raw materials fluctuated, providing moderate support for PP costs.

In terms of supply: At the end of May, the load of domestic PP enterprises remained stable with small fluctuations, and the market supply remained generally abundant. Overall, the industry's overall load level remains almost unchanged from the mid month level of 77%, with an average weekly total output of approximately 750,000 tons also stabilizing. The production capacity loss caused by maintenance plans of companies such as interval JuzhengRMB and Jinergy Chemical has been basically smoothed out by the restart of companies such as Lanzhou Petrochemical. At the same time, the new production capacity of 1.4 million tons in the next quarter is approaching, and there is a clear expectation of loose supply in the future. The total domestic inventory continues to decline to below 820,000 tons, but remains at a high level. Overall, there is still some suppression on the spot price of PP by the supply side.

In terms of demand:At the end of May, the demand side of PP continued to be weak, and on-site trading gradually entered the traditional off-season. The goods were basically ready before the Dragon Boat Festival, and the market remained weak and rigid. The consumption level of plastic weaving terminal enterprises has returned to the off-season level ahead of schedule. With the passing of the small peak in material usage, the release speed of PP demand in fields such as construction and agriculture has slowed down. The impact of the suspension of tariffs between China and the United States in the early stage has cooled down, and although the export resistance of downstream PP products in China has decreased, the export increment still needs time. At the same time, there is still supply pressure in the industry, and inventory still needs to be cleared, offsetting some positive factors. As the current holiday approaches, buyers are cautious in their purchasing operations to maintain production, leaning towards scattered small orders, and new market transactions are returning to a flat state. Overall, the performance of the PP demand side at the end of May was average.

At the end of May, the domestic PP market prices were consolidating and weak. Fundamentally speaking, the overall performance of upstream raw materials in supporting PP is average. The industry has abundant supply, inventory continues to be digested, and consumption has entered the off-season level. At present, the positive sentiment of macroeconomic policies is being digested, and the market is dominated by supply and demand, with businesses entering the end of month task completion and settlement range. It is expected that the PP market will continue to consolidate in the short term, and it is recommended to closely monitor the new production situation in the industry.

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