According to the Commodity Market Analysis System of SunSirs, the domestic PP market fluctuated and consolidated at the end of August, with most brand products experiencing narrow price changes. As of August 27th, the mainstream offer price for wire drawing by domestic manufacturers and traders is around 7,215 RMB/ton, a decrease of -1.03% compared to the price level at the beginning of August.
In terms of raw materials: In the middle of the month, the geopolitical situation in Eastern Europe eased, and market concerns about unstable crude oil supply weakened. At the same time, OPEC+ production expectations were clear, and negative factors in international oil prices have continued to this day. At the end of the month, the trend of propane followed the decline of crude oil, and the cost support for PDH manufacturing enterprises continued to weaken. The price of propylene has fluctuated narrowly, and the recent increase in enterprise load, coupled with the average follow-up of downstream demand, may drag down the future market trend. Overall, the prices of PP raw materials are showing a loosening trend in cost support.
Supply side: At the end of August, the operating rate of domestic PP enterprises remained stable with small increases. Overall, the industry's load level remained stable at 78%, with an average weekly total output of nearly 790,000 tons. In the latter half of the year, the first and second lines of Zhejiang Petrochemical and Jingbo Polyolefin will resume work successively, coupled with the approaching production of the 900,000 ton new production line in Daxie, Ningbo. The trend of loose market supply is clear, which seriously limits the support from the supply side. The current on-site supply remains abundant, with inventory levels approaching over 800,000 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: At the end of August, polypropylene was in the transition period between peak and off peak seasons, and market players were looking forward to and preparing for a surge in PP demand. However, the trading atmosphere in the field remained light. Merchants have not seen large-scale advance stocking, and new orders on site still tend to be scattered and delivered according to contracts, with operations tending to be on-demand. The improvement of source liquidity is limited. The median load of downstream enterprises has slightly increased, and there is a potential willingness to build warehouses in areas such as plastic weaving, construction, and agriculture. At the same time, there are macro guidance on supply side reforms and other news, and the market has solid bottoming forces. It is recommended to closely monitor the downstream construction dynamics.
At the end of August, the domestic PP market prices fluctuated and consolidated. Fundamentally speaking, the upstream raw material market is weak, and the overall support for PP is weakened. The industry load is high, stable and slightly rising, with expectations of loose supply in the future, and consumption is at the junction of peak and off peak seasons. The current market is experiencing a rising atmosphere, and it is expected that there may be an upward trend during the PP peak season.
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