According to the Commodity Market Analysis System of SunSirs, the domestic PP market fluctuated and fell in early August, with some brand products experiencing price reductions. As of August 11th, the mainstream offer price for wire drawing by domestic producers and traders is around 7,246.67 RMB/ton, a decrease of -0.59% compared to the price level at the beginning of July.
In terms of raw materials: In early August, the geopolitical situation in Eastern Europe became increasingly tense, and market concerns about unstable crude oil supply increased. At the same time, OPEC+production plans were delayed, and there were certain favorable factors for international oil prices. The trend of propane is still acceptable, and the cost support for PDH manufacturing enterprises has increased. In the early stage, propylene production and resumption of work were common, and it hit the bottom and rebounded in early August. Overall, the prices of PP raw materials within the range have shown a trend of improvement in cost support.
Supply side: In early August, the operating rate of domestic PP enterprises remained stable with small fluctuations. The overall industry load level within the range is still around 77%, with an average weekly total output of around 770,000 tons. However, middling coal, Yanshan Petrochemical and Zhenhai Refining and Chemical Plant will return in the middle of the year. At the same time, as the production of the 900,000 ton new production line in Daxie, Ningbo approaches, the significant trend of loose supply in the market severely limits the support from the supply side. The current on-site supply remains abundant, with inventory levels rising to over 850,000 tons and slow digestion. Overall, there has been no improvement in the support for spot prices from the PP supply side, and there are still many pressures.
In terms of demand: In August, the trend of low season consumption of polypropylene continued, and the demand for PP remained weak, resulting in a quiet trading atmosphere on the market. Merchants have a low willingness to stock up in advance, and they mainly focus on using and taking goods as needed on site. The load on downstream enterprises continues to weaken, and the consumption level of end enterprises in the plastic weaving sector is particularly evident in the off-season. Materials used in construction, agriculture, and other fields are also low-level and flat. On site new orders tend to be scattered small orders and contract deliveries, with average liquidity of supply and slow release of PP demand. At present, the macro guidance is not clear, and in the pattern of weak exports and domestic demand, the demand side of PP has poor support for spot prices.
In early August, the domestic PP market prices fluctuated and fell. Fundamentally speaking, the overall outlook for upstream raw materials is positive, and overall support for PP is still acceptable. 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 current supply-demand contradiction is difficult to improve, and the mentality of industry players is bearish. It is expected that the PP market will continue to remain stagnant in the short term.
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