According to the Commodity Market Analysis System of SunSirs, the domestic PP price position was relatively low at the end of December, and the market stopped falling and stabilized. The prices of various brand products rebounded narrowly. As of December 31st, the benchmark price for PP drawing offered by SunSirs was 6,170.00 RMB/ton, with a year-on-year increase or decrease of 3.04% in price level.

In terms of raw materials: The previous OPEC+ new round of production increase plan has raised concerns among industry players about an oversupply of crude oil. Recently, due to the drag of demand during holidays, the center of gravity of oil prices has fluctuated after falling. In terms of propylene, it has risen to a temporary high in the middle of the month, and the good news is gradually coming out. In addition, with the recovery of supply strength, the current spot prices have fallen from a low level. Propane continues to be boosted by high external prices, with high port cargo prices and overall strong performance. Overall, the prices of various raw materials for PP have fluctuated, providing moderate support for PP costs.

Supply side: At the end of December, the restart and maintenance of domestic PP enterprises were generally balanced, and the overall operating rate slightly increased. As of the time of writing, the overall load level of the domestic industry is around 77%, with little difference compared to mid month. The current weekly average total output is over 790,000 tons, and the inventory position is around 790,000 tons. The on-site supply remains abundant. However, there are multiple maintenance plans announced in January, and there is an expectation of a decrease in production. Overall, the supply side's support for spot prices has flattened.

In terms of demand: At the end of the year, domestic economic work conferences released neutral information, but the results did not meet market expectations and did not strongly boost the mentality of industry players. E-commerce has a certain driving force on consumption of packaging, home appliances, etc., but it has limited improvement on the overall trading atmosphere of the industry market. At the same time, the impact of the Federal Reserve's interest rate cuts 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 raw material digestion is slow. The demand for capital withdrawal at the end of the year has constrained the willingness of end enterprises to build warehouses, and midstream operators have increased their willingness to sell off their stocks. The demand momentum is difficult to support the PP spot price.

At the end of December, the domestic PP market prices were temporarily low, and the market stopped falling and stabilized. Fundamentally speaking, the upstream raw material market is fluctuating, and the overall support for PP is average. High level adjustment of industry load, limited improvement in consumption. Under the large base production capacity, the pattern of loose supply will not change. However, due to the concentrated destocking operations of petrochemical enterprises in the early stage, some buying orders on dips will be stimulated to enter the market. It is expected that the PP market may enter a period of adjustment.

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