SunSirs: Strong Cost Side, China PP Market continues to rise

According to the Commodity Market Analysis System of SunSirs, the PP market was relatively strong in early August, with various wire drawing brands fluctuating and rising. As of August 4th, the mainstream quoted price of T30S (wire drawing) by domestic producers and traders is around 7,471.43 RMB/ton, with an increase or decrease of +0.29% compared to the average price level at the beginning of the month.

Industry chain: In terms of upstream and recent PP raw materials, there is still a high level of positive international crude oil, but the degree is weakened by factors such as the Federal Reserve's interest rate hike. This week, propylene was also affected by this and followed the volatile crude oil market. In terms of propane, the operation is relatively strong, and the support for PDH is still acceptable. In addition, coal prices have remained stable, and last week the overall strength of upstream polypropylene was relatively strong, which has strengthened support for the cost side.

The raw materials in all directions are generally strong, and the cost support for PP is still acceptable. In terms of industry load, the overall industry load remained at around 78% last week, with a slight increase in position compared to the previous period. The overall supply of goods was stable, and the on-site supply of goods was sufficient. In terms of demand, there has been a slight increase, with the main downstream plastic weaving operating at 40% to 50%. In terms of film materials and injection molding, the operating rate of enterprises has maintained the previous level, and the overall position is still good. The stocking situation of terminal enterprises has increased slightly, and some enterprises have procurement replenishment operations.

In terms of fiber materials, according to the Commodity Market Analysis System of SunSirs, as of August 4th, the spot price of domestic fiber PP has increased. The mainstream quoted price of domestic producers and traders for Z30S (fiber) is around 7,462.50 RMB/ton, with an increase or decrease of +0.84% compared to the average price at the beginning of the month, and a decrease of -9.36% compared to the same period last year. In July, the downstream non-woven fabric enterprises, the main force of PP fiber materials, maintained a low horizontal load, and the overall operating rate remained stable at around 31%. The demand for fiber materials in the market is weak, and the digestion speed of non-woven end products is average. Enterprises have average efforts in replenishing fiber PP. The price increase is due to the strengthening of polypropylene costs, and it is expected that fiber materials may continue to operate in a stronger direction in the short term.

In terms of melt blown materials, last week's melt blown PP market fluctuated and rose. As of July 31st, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of SunSirs is about 8,150 RMB/ton. Compared with the average price level at the beginning of the month, the increase and decrease is +0.93%, with a year-on-year decrease of 13.72%. At present, the domestic and international news of the health incident has basically subsided, and the consumption of medical meltblown fabric materials is weak. There is also no significant boost in domestic and foreign demand. Affected by the strengthening of the cost side, the factory prices of melt blown material enterprises have increased significantly. It is expected that the melt blown material market may maintain a volatile consolidation trend.

PP analysts from SunSirs believe that the polypropylene market rose last week. The overall trend of upstream raw materials is acceptable, and the support from the cost side for the market is still ongoing. The construction of terminal enterprises has maintained the previous level, and there has been a slight increase in the narrow range of goods acquisition. In the short term, the release of demand in the future is unlikely to further increase, and it is expected that the PP market situation may return to consolidation and operation.

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