According to the Commodity Market Analysis System of SunSirs, the domestic PP market fluctuated weakly in the first half of July, with some brand products experiencing narrow price reductions. As of July 15th, the mainstream offer price for wire drawing by domestic producers and traders is around 7,366.67 RMB/ton, a decrease of -1.23% compared to the price level at the beginning of July.
In terms of raw materials: Since the beginning of July, the geopolitical situation in the Middle East has eased, and the market's concerns about the risk of crude oil supply interruption have eased. At the same time, OPEC+has a firm willingness to increase production, and international oil prices are under pressure and fluctuating. In terms of propane, it has followed the decline of crude oil in the early stage, and consumption has been sluggish. It has continued to decline for the past half month, and the cost support for PDH manufacturing enterprises has fallen. Acrylic production and resumption of work are common, and the market continues the downward trend from last month. Overall, the prices of PP raw materials in the first half of July provided weak support for costs.
In terms of supply: Since July, domestic PP enterprises have been undergoing centralized maintenance, while resuming work and releasing production capacity have also been concentrated. Middling coal has extended the parking period for 45 days, and the load of enterprises such as Jingbo, Dalian Petrochemical and Tianjin Bohai Chemical has been reduced. However, Zhejiang Petrochemical, Quanzhou Guoheng, and Jiutai Group have increased their load, and a total of 1.4 million tons of new production capacity, including the newly put into operation Zhenhai Line 4 and Yulong Line 4, has been put into operation, basically smoothing out the maintenance benefits and severely limiting the long-term supply pattern. Overall, the overall load level within the interval has slightly decreased from 77% at the beginning of the month to 76%, and the weekly average total output has remained stable at around 770,000 tons. The supply of goods remains abundant, with a monthly inventory of 790,000 tons in China, and the digestion situation is average. Overall, the supply side provided moderate support for PP spot prices in early July.
In terms of demand: July is the traditional off-season for polypropylene consumption, and the demand for PP continues to be weak, resulting in a quiet trading atmosphere on the market. Merchants have hardly seen any advance stocking operations, and the on-site situation remains in a state of urgent need, with a focus on on-demand use. In terms of plastic weaving, the consumption level of terminal enterprises is already at the off-season level, and downstream PP enterprises in China are struggling to start production. Materials used in construction, agriculture and other fields are also at a low level and flat. On site new orders tend to be scattered small orders and contract deliveries, with flat liquidity of supply and slow release of PP demand. In the context of weak export and domestic demand, the demand side of PP has not provided strong support for spot prices.
The domestic PP market prices fluctuated after falling in the first half of July. Fundamentally speaking, the overall weakness of upstream raw materials has led to a decline in overall support for PP. The industry load is stable with small fluctuations, and there is an expectation of abundant supply in the future. Consumption is at a low season level. The contradiction between supply and demand and the decrease in cost value are combined, and the mentality of operators is bearish. It is expected that the PP market will continue to be stagnant in the short term.
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