SunSirs: Cost reduction, Supply Increase, China PP Peak Season Market Hindered

According to the Commodity Market Analysis System of SunSirs, the PP market rose first and then fell this week, with various wire drawing brands operating in a volatile manner. As of September 22nd, the mainstream quoted price of T30S (wire drawing) by domestic producers and traders is around 8,035.71 RMB/ton, with an increase or decrease of +3.97% compared to the average price level at the beginning of the month.

Industry chain: Recently, in terms of PP raw materials, international crude oil fell on Thursday night due to the Federal Reserve's suspension of interest rate hikes. At the same time, it negatively affects the propylene market and suppresses market confidence. However, there is not much pressure on on-site inventory, and there is a strong willingness for upstream pricing, with a focus on stalemate operations. In terms of PDH, the supply of propane as a raw material has increased, but it has also weakened simultaneously. Only methanol showed an upward trend. Overall, the cost side support of polypropylene is loose.

The overall trend of raw materials in all directions is weak, and the cost side's support for PP has weakened. In terms of industry load, the overall industry load has been around 79% recently, with a narrow upward adjustment compared to the previous period. Although there are new devices put into operation, it will take some time for stable shipments, so the overall supply of goods is stable, and the on-site supply pressure is temporarily stable. In terms of demand, it has leveled off compared to the early stage, with downstream plastic weaving operating at a horizontal level of over 40%. In terms of film materials and injection molding, the operating rate of enterprises has remained around 60%, and the overall position has remained in the early stage. The stocking situation of terminal enterprises is based on demand procurement. After the PP price rises, there is a certain resistance to high price sources. At the same time, as the Double Festival approaches, the stocking demand is about to run out, and the drawing material first rises and then falls.

In terms of fiber materials, according to the Commodity Market Analysis System of SunSirs, as of September 22, the spot price of domestic fiber PP also rose first and then fell. The mainstream quoted price of domestic producers and traders for Z30S (fiber) is around 8,075 RMB/ton, with an increase or decrease of+5.38% compared to the average price at the beginning of the month, and a decrease of 3.10% compared to the same period last year. Recently, the downstream non-woven fabric enterprises, the main force of PP fiber materials, have seen a low load increase, with an overall operating rate of around 37%. The demand for fiber materials in the market has increased compared to the previous period, and the digestion speed of non-woven end products is still acceptable. The enterprise's efforts to replenish fiber PP have increased the industry load. It is expected that in the short term, fiber materials may enter a weak finishing stage due to the impact of weaker costs.

In terms of melt blown materials, the recent melt blown PP market has been relatively strong. As of September 22nd, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of SunSirs is around 8,200 RMB/ton. Compared with the average price level at the beginning of the month, the increase and decrease is +1.23%, and there is a decrease of 10.22% compared to the same period last year. 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. The price of meltblown non-woven fabrics has remained stable and fluctuated slightly, and it is expected that the market for meltblown materials may maintain the consolidation market.

PP analysts from SunSirs believe that the polypropylene market has been volatile this week. The overall trend of upstream raw materials has shifted from strong to weak, with loose support from the cost side to the market. Terminal enterprises continue to operate at the previous level, with a bias towards maintaining production and a certain resistance towards high priced goods. The current holiday is approaching, and the benefits of pre holiday stocking are gradually running out. It is expected that in the short term, the PP market may be hindered by the cost side drag and the upward trend will be hindered.

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