According to the Commodity Market Analysis System of SunSirs, the domestic PP market fluctuated and fell in November, with prices of various brand products falling more and rising less. As of November 30th, the benchmark price for PP wire drawing offered by SunSirs was 6,363.33 RMB/ton, a decrease of -5.35% compared to the price level at the beginning of November.
In terms of raw materials: Since November, the impact of OPEC+ new round of production increases and regional easing has intensified concerns among industry players about long-term oversupply of crude oil. At the same time, the weakening of US demand and tariff issues have dragged down global economic and demand expectations, resulting in a weak and volatile international oil price market. In the early stage, due to the decline in crude oil prices, the inventory position of propylene decreased in the second half of the month, and the supply of goods tightened. The pressure on enterprise sales has eased, and we have started to control the quantity of shipments. Affected by this, spot prices stopped falling and pushed up. At the beginning of the month, the strengthening of external markets boosted the propane sector, with port cargo leading the increase and overall prices rising. Overall, the prices of various raw materials for PP have fluctuated, providing moderate support for PP costs.
Supply side: Entering November, the restart and maintenance of domestic PP enterprises are intertwined, and the overall operating rate has limited changes. As of the time of writing, the overall load level of the domestic industry is around 77.5%, with little difference from the beginning of the month. At the beginning of the month, the production lines of Ningxia Petrochemical, Guangdong Petrochemical, and Beihai Refining and Chemical underwent short repairs, while the production line of Dushanzi Petrochemical stopped. Zhongyue Zhenhai Refining and Chemical Third Line, Jingbo Petrochemical Second Line, and Luoyang Petrochemical Second Line have resumed operations. Recently, the maintenance of equipment failures such as Shanghai SECCO has largely offset the return and loss of production capacity. The current weekly average total production is close to 810,000 tons, and the inventory position is around 870,000 tons. The on-site supply remains abundant. Overall, the supply side's support for spot prices has flattened.
In terms of demand: The results of the China US talks at the beginning of the month did not meet market expectations, which did not strongly boost the mentality of industry players. Although the November Double 11 e-commerce festival has had a certain impact on packaging, home appliances, and other consumption, the improvement in market trading atmosphere is limited. At the same time, the impact of the Federal Reserve's interest rate cuts and trade protectionism is still present, dragging down the export of end products, and the load position of downstream enterprises is not ideal. The current PP terminal enterprise finished product market is generally hot, and the digestion of raw materials is slow, resulting in a low willingness to build raw material warehouses. The large supply base of the industry does not match the weak rigid demand of terminal factories, and the demand momentum is difficult to support the PP spot price.
The domestic PP market prices fluctuated and fell in November. Fundamentally speaking, the upstream raw material market is fluctuating, and the overall support for PP is average. The industry load remains stable at a high level, with limited improvement in consumption. Under the large base production capacity, the loose supply pattern remains unchanged, and there is a lack of motivation to further digest inventory. It is expected that the PP market will continue to adjust.
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