SunSirs: Low Willingness to Build Downstream Positions at the End of 2025, China PP Market Remains Weak

According to the Commodity Market Analysis System of SunSirs, as the end of 2025 approaches, the domestic PP market is expected to maintain weak consolidation, with prices of various brand products falling more and rising less. As of December 22nd, the benchmark price for PP wire drawing offered by SunSirs was 6,253.33 RMB/ton, with a year-on-year increase or decrease of -2.39% in price level.

In terms of raw materials: In the early stage, OPEC+ new round of production increases has intensified concerns among industry players about oversupply of crude oil. Recently, due to the low price center and the approaching holiday season, seasonal demand has risen, and the international oil price market has rebounded at a low level. In the early stage, the inventory position of propylene was low, the supply of goods was tight, and the spot price was high. In the middle of the month, it has risen to a temporary high, and the current favorable conditions are gradually dissipating, causing a slight decline in spot prices. In terms of propane, the external market prices are high, the port cargo prices are high, and the overall prices are firm. Overall, the prices of various raw materials for PP are fluctuating, providing sufficient support for PP costs.

Supply side: Entering the second half of December, the restart and maintenance of domestic PP enterprises are generally balanced, with limited changes in overall operating rates. As of the time of writing, the overall load level of the domestic industry is around 79%, with little difference from the beginning of the month. The current weekly average total production is close to 820,000 tons, with inventory levels around 800,000 tons, and the on-site supply remains abundant. However, there are multiple maintenance plans released in the future market, and there is an expectation of a slight decrease in production. Overall, the supply side provides moderate support for spot prices.

In terms of demand: The domestic economic work conference 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 and trade protectionism 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. As the end of the year approaches, the willingness of terminal enterprises to build warehouses is low, and midstream operators are increasing their operations of offering discounts to reduce inventory. The demand momentum is difficult to support the PP spot price.

Entering late December, the domestic PP market prices remained weak and volatile. From a fundamental perspective, the upstream raw material market has seen more ups and downs, and the overall support for PP is still acceptable. The industry load remains stable at a high level, with limited improvement in consumption. Under the large base production capacity, the loose supply pattern remains unchanged, and there is a lack of motivation to further digest inventory. It is expected that the PP market will continue to adjust.

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