According to the Commodity Market Analysis System of SunSirs, the domestic PP market fluctuated in the first half of November, with prices of various grades of products falling more and rising less. As of November 12th, the benchmark price for PP wire drawing offered by SunSirs was 6,556.67 RMB/ton, a decrease of -2.48% compared to the price level at the beginning of November.
In terms of raw materials: The international oil price market in this range has fluctuated widely. OPEC+'s new round of production increases has raised concerns in the market about the risk of long-term oversupply. The easing of geopolitical conflicts, coupled with weakened demand from the United States, has led to a weak consolidation of international oil prices. In the early stage of propylene, due to the decline in crude oil prices, low level replenishment orders have recently begun to follow up. While on-site inventory has been digested, spot prices have stopped falling and rebounded. Propane prices continue to decline due to low external prices and sluggish consumption. Overall, the prices of various PP raw materials are difficult to support the cost.
Supply side: The overall change in the operating rate of domestic PP enterprises in the first half of November was relatively narrow. As of the time of writing, the overall load level of the domestic industry is 79%. The current weekly average total production is close to 800,000 tons. Short repairs were made to the production lines of Ningxia Petrochemical, Guangdong Petrochemical, and Beihai Refining within the interval, while the first line of Dushanzi Petrochemical was shut down. In addition, there are other temporary shutdown plans such as Guangxi Petrochemical and CNOOC Daxie Petrochemical. However, due to the large supply base of the industry, the on-site supply remains abundant, and the inventory level is close to 900,000 tons. Overall, there has been no improvement in the support for spot prices from the PP supply side.
In terms of demand: In the first half of November, the market continued to decline against the traditional peak season, and the driving force of Double 11 e-commerce consumption within the range had limited improvement in market trading atmosphere, while some positive factors were eroded by many negative factors. The results of the China US talks in the first ten days did not meet market expectations, and the mentality of the industry is not strong. In addition to the macroeconomic fatigue, external markets are affected by the Federal Reserve's interest rate cuts and trade protectionism, dragging end products overseas, constraining downstream enterprise loads, weak demand, and inventory accumulation. However, overall, the demand side has poor momentum, making it difficult to support PP spot prices.
In the first half of November, the domestic PP market prices fluctuated and fell. From a fundamental perspective, the upstream raw material market has experienced more declines than gains, resulting in poor overall support for PP. The improvement in consumption is limited, and the industry load has risen slightly at a high level. With a large base production capacity, the expectation of loose supply remains unchanged, and the market lacks strong guidance. It is expected that the PP market will continue to experience a weak adjustment trend.
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