According to the Commodity Market Analysis System of SunSirs, after the decline in the domestic PP market in October, the prices of various brand products are basically at a five-year low. As of October 31st, the benchmark price for PP wire drawing offered by SunSirs was 6,723.33 RMB/ton, a decrease of -2.84% compared to the price level at the beginning of October.
In terms of raw materials: In the early stage of this period, the situation in the Middle East eased, and OPEC+launched a new round of production increase of 1.65 million barrels per day. In addition, the weakening of US demand and trade barriers dragged down global demand expectations, and market concerns about long-term oversupply led to a decline in international oil prices. In the second half of the month, the geopolitical situation in the Middle East heated up, US crude oil inventories decreased, and the international oil price market quickly recovered. In the early stage, the propylene sector rapidly declined due to the decline in crude oil prices and insufficient trading. Recently, there has been no improvement in the market, and prices have remained low. Industry players are mainly observing and waiting. After the double festival, the supply of propane tightened, and the market rebounded, dragged down by the decline in external markets and sluggish consumption, causing prices to gradually fall. Overall, the prices of various PP raw materials are difficult to support the cost.
Supply side: The operating rate of domestic PP enterprises remained stable and fluctuated slightly in October, with a narrow range overall. As of the end of the month, the overall load level of the domestic industry was 77%, which is comparable to the operating rate in early October. The current weekly average total production is close to 780,000 tons. During the trial production of 400,000 tons/year equipment at Guangxi Petrochemical in the middle of the month, there was a mix of industry shutdowns and troubleshooting at the end of the month. On site supply remains abundant, with inventory levels accumulating at a high level of over 920,000 tons. In addition, the fourth line of Zhejiang Petrochemical was restarted in early November, and the trend of relaxation in the future market is basically clear. Overall, the PP supply side still lacks sufficient support for spot prices.
In terms of demand: October falls within the traditional peak season for polypropylene. Although the materials used in fields such as plastic weaving and agriculture have improved to some extent at the end of last month, this year's peak season is still being counterfeited by PP prices. The positive news of improved market trading atmosphere has been smoothed out by many negative factors, coupled with the previous announcement of the Federal Reserve's interest rate cut and the subsequent drag of US trade barriers on end products going global, which has constrained the load on downstream enterprises. Lack of demand and accumulation of inventory. On the other hand, the Fourth Plenary Session of the Communist Party of China set goals for the economic direction, and the China US talks reached a certain consensus. Boosted by it, the supply-demand margin has slightly improved. In the future, November will boost e-commerce consumption, and there may be an increase in new orders in the film material field. However, overall, the demand side has poor momentum, making it difficult to support PP spot prices.
After the domestic PP market price fell in October, it sorted out. From a fundamental perspective, the upstream raw material market has seen more ups and fewer downs, indicating poor overall support for PP. The industry load remains stable at a high level, and the expectation of loose supply remains unchanged. The improvement in consumption is limited, and the market lacks positive guidance. It is expected that the PP market will continue to adjust.
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