SunSirs: China PP Market Tends to be Strong and Volatile after the Spring Festival

According to the Commodity Market Analysis System of SunSirs, the PP market fluctuated strongly in the week after the Spring Festival, with prices of various wire drawing brands fluctuating and rising. As of February 23rd, the mainstream quoted price for T30S (wire drawing) by domestic producers and traders is around 7,650 RMB/ton, basically returning to the price level at the beginning of the month.

Industry chain: In terms of PP raw materials, the international OPEC reduction in crude oil production before the year and the continued tense news in the Red Sea shipping have affected the rise of crude oil prices. Although there has been a slight pullback in recent times, the support for the cost side of oil based PP has generally loosened at a high level. Affected by it, propylene also undergoes a narrow correction, with little impact on PP. In terms of PDH, propane demand remains weak and prices have been adjusted. The methanol market is relatively stable. Upstream raw materials fluctuate, and overall support for PP is still acceptable.

Overall, the raw material market is relatively strong, and the cost support for PP is still acceptable. In terms of industry load, there was a slight return of production lines last week, with the industry average load rising narrowly to around 78%. The supply of goods remains abundant, and the accumulation of inventory is relatively high, resulting in increasingly significant pressure on on-site supply. In terms of demand, just after the Lunar New Year, the return of end enterprises is not ideal, and the comprehensive operating rate of downstream PP enterprises such as plastic weaving, film materials, and injection molding remains at a low level during the Spring Festival period. The enterprise's replenishment operation is not active, and the trading atmosphere on the market is not strong. The overall market for wire drawing materials is supported by costs, and demand is dragging down, hindering the rise.

In terms of fiber materials, according to the commodity market analysis system of SunSirs, as of February 23, the spot price of domestic fiber PP has also increased. The mainstream quoted price for domestic producers and traders of Z30S (fiber) is around 7,512 RMB/ton, with an increase or decrease of -0.33% compared to the average price at the beginning of the month, and a decrease of 5.11% compared to the same period last year. During the week, the main downstream non-woven fabric enterprises for PP fiber materials saw an increase in load, with operating rates increasing by about 5% to 15% compared to before the holiday, and operating levels remain at a low level. The digestion speed of end products is sideways, and the demand for non-woven fabrics in the market is mainly based on contracts. The support for fiber material prices is average, and it is expected that the fiber material market will continue to consolidate.

In terms of melt blown materials, the melt blown PP market had some recovery last week. As of February 23, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of SunSirs is about 7,987 RMB/ton. Compared with the average price level at the beginning of the month, the increase and decrease is -0.16%, and there is a year-on-year decrease of 16.22%. At present, the demand for facial protection in China is generally high, and the consumption of medical melt blown fabric materials is not significantly driven. There is also no significant boost in domestic and foreign demand. In addition, downstream factories are resuming work slowly and there are not many new orders, resulting in a decrease in overall operating rates. It is expected that the melt blown material market will continue to be weak and stable.

PP analysts from SunSirs believe that the polypropylene market fluctuated strongly last week. The overall trend of upstream raw materials is still acceptable, and the support of the cost side for the market is still strong. Due to delayed resumption of work, terminal enterprises have started operating at a low rate, and some pre holiday inventory still needs to be digested. The load of PP equipment has remained stable and slightly increased, but there were multiple production units in March, and there is an expectation of increased supply in the future. At present, the PP consumption is expected to expand after the Lantern Festival. At the same time, there is some inventory that needs to be digested. It is expected that the PP market will enter a period of consolidation.

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