SunSirs: Balanced Market Performance, China PP Market is in Consolidation

According to the Commodity Market Analysis System of SunSirs, the PP market experienced a narrow range of fluctuations in early March, with prices of various wire drawing brands adjusting narrowly. As of March 12th, the mainstream quoted price for T30S (wire drawing) by domestic producers and traders is around 7,707.14 RMB/ton, which has basically fallen back to the price level at the beginning of the month.

Industry chain: In terms of PP raw materials, the price effect has been diluted due to the reduction of international crude oil OPEC production and the tense news of Red Sea shipping in the early stage, which has recently loosened support for the high cost of oil to PP production. After the rise of propylene, downstream demand was suppressed and entered a downward trend, with a moderate impact on PP. In terms of PDH, propane continues to fluctuate narrowly and its price remains relatively stable. The methanol market is also relatively stable. The upstream raw materials are generally stable, and the overall support for PP is relatively weak.

Overall, the raw material industry is generally average, with slight loosening of support for the PP cost side. In terms of industry load, the average industry load is over 76%, and there has been a recent return of some production lines. At the same time, new production capacity will be implemented and discharged in March, with an expected increase in production. The market supply of goods remains abundant, and the inventory digestion situation last week was still good, but the overall inventory position is still high, with slightly greater pressure on on-site supply. In terms of demand, the basic return of end enterprises has been completed, and the comprehensive operating rates of downstream PP enterprises such as plastic weaving, film materials, and injection molding are about 39%, 64%, and 52%, respectively, with no significant improvement. The replenishment operation of enterprises is average, and the trading atmosphere on the exchange is not strong. The overall market for wire drawing materials is mixed, with a dilemma of ups and downs.

In terms of fiber materials, according to the commodity market analysis system of SunSirs, as of March 12th, the spot price of domestic fiber PP has also increased. The mainstream quoted price for domestic producers and traders of Z30S (fiber) is around 7,525 RMB/ton, with an increase or decrease of +0.17% compared to the average price at the beginning of the month, and a decrease of 4.34% compared to the same period last year. Recently, the main downstream non-woven fabric enterprises of PP fiber materials have seen an increase in load, with operating rates increasing by about 2% to 23% compared to the beginning of the month, 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 has recovered this week. As of March 12th, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of SunSirs is about 7,975 RMB/ton. Compared with the average price level at the beginning of the month, the increase and decrease is -0.31%, and there is a decrease of 12.68% compared to the same period last year. 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 have a low load, resulting in new orders leaning towards loose orders. 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 remained stable and volatile in early March. The overall trend of upstream raw materials is average, and the support from the cost side for the market is narrow and loose. The resumption of work by terminal enterprises did not meet expectations, and their willingness to stock up was not strong. There is a plan for the return of PP maintenance equipment in the near future, and there are also production facilities. There is an expectation of increased supply in the future. The current resistance to PP consumption is relatively high, and the supply side is under pressure. It is expected that the PP market will enter a weak consolidation period in the short term.

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