SunSirs: Following Demands Are Faint, PP Surrenders Profits to Delivery Without Immediate Payment

According to the data monitored by SunSirs, on the fourth week of July, the market trend of PP indicates low level, for every grade price adjusts to be lower modestly. Up to July 24, in terms of T30S (hairline finish), Chinese manufacture and trader offer the price mainly about 7,800 RMB/ton, which has decreased by 0.21% than the average price of the early July.

Factor Analysis

The data from SunSirs monitoring propene, the upstream of polypropylene, the market price in Shandong is stable after climbing during the fourth week of July. The weekend price is 6870 RMB/ton, and the weekly gain is 1.25% that has 0.07% increase compared with early June. Recently, the price of propene is fluctuating periodically, but the range is steady. From the beginning of July, the price turns to be 200~250 RMB/ton lower continuously. The price rebounding 250 RMB/ton between 6^th and 9^th, but the price declined again 150~200 RMB/ton between 12^th and 16^th. The third rise began on 18^th, which has been up to 150 RMB/ton until now. These days, the price turns to be flat, the strike price is about 6800~7100 RMB/ton, and the mainstream price is 6800~6850 RMB/ton. Now the shipment of propene manufacturers is ordinary, and the burden of stock is not heavy. The situation of crude oil has a slight rise, and the rate of operation in downstream industry is acceptable, but the desire to purchase is not so active, so the trading is steady temporarily. At present, the market prices of propene mostly stand at the upper limit of the range, and exploring the higher will encounter pressure, so it can be predicted that the price will depress recently.

On July, the fluctuating adjustment of upstream propene doesn’t sustain PP’s cost end greatly.

These days, the behavior of PP (hairline finish) spot price is weak. According to the data monitored by SunSirs, early July the spot price of PP (hairline finish) is functioning steadily, having a 250 RMB/ton rise from 6^th. On 12^th, the average price of hairline finish materials reached 8,066.67 RMB/ton, which is the highest point recently, but the price gradually has been rallying until now. Up to June 24^th, domestic producers and traders T30S (hairline finish) mainly offer the price at 7,800 RMB/ton or so, and the monthly range has reached 3.31% until now. As for the supply, recent production of hairline finish operates normally, and it’s said that there will be new apparatus later this year. Early this month, stricken by the imported materials, the inventory has an increase to some degree. However, the promotion for demands is limited, but nowadays the desire to stock goods from the downstream is not active, and most of them are still in wait-and -see mode, so the atmosphere of transaction is a little cold. In addition, the futures are dropping, causing the market to follow the declining trend. However, as the end of the month is approaching, the traders positively lowered the price, aiming to achieve the previous planning. It’s predicted that PP market will keep on fluctuation within an amplitude.

According to the data by SunSirs, up to July 24^th, the mainstream quotation from producers and traders Z30S (fiber) is about 7,783.33 RMB/ton, which goes down by 0.85% compared with the average price early this month. At present, the spot price of PP is stable. Although the overall disk is beneficial from macro demands, the speed of casting out inventory is slow so the pressure on supply end augments. With the closure to the end of the month, there are benefits that are surrendered in transaction, and the attitude from the downstream is still conservative, so the follow-up orders are scarce and the floor deal is a little bad. Recently, the disk of PP (fiber) is flat with decrease, which is into stagnation.

As for PP melting blown materials, the condition remains weak. According to the data from SunSirs, the price of PP (melting blown material）is still going down. Till 24^th, from sample enterprises, the offer price of melt-blown PP whose circuit breaker index is about 17,000 RMB/ton. On general, Chinese public health events and the demands for anti-epidemic gears are inclined to be stable. Even some products that are involved with pandemic prevention are under oversupply, so some prices are receding. Melt-blown nonwovens, the outright downstream one, also shrink the need greatly, and the diversity of medical implements bifurcate the demands of masks. As PP (melt-blown) follows the downstream, traders are passive, so the cases of leaving are numerous and in view of estimation, the condition can’t improve recently.

Market Outlook

PP analyst from SunSirs holds the view that Chinese PP market during the fourth week of July is weak. The upstream propene market is shuddering, whose support for propene is not so well. PP (hairline finish) is falling, and PP (fiber) is stable with tiny changes. The demands for PP (melt-blown) is reducing, so the price keeps on rallying. At present, China is still under maintenance peak season, so the increasing supply of granular material end is limited, but the burden from shipment is relatively heavy these days. Additionally, although the macro demands are recovering, there is a piece of news that new implements are being put to production, so the speed of reducing the inventory slows down. The downstream factories follow up orders badly, so the attitude of traders is pessimistic and transaction is modest. It is suggested that the market of PP will continue to decline and the further trends of supply and demand need focusing on.

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