SunSirs: Concentrated Maintenance Coincides with Falling Costs— China PP Market Experiences Volatility in April

According to data from SunSirs' "Spot Connect" service, the domestic PP market experienced high-level volatility in April, with prices for various product grades showing a mixed trend of both gains and losses. As of April 30, the SunSirs benchmark price for PP wire-drawing grade material was quoted at 9,316.67 RMB/ton—a 4.18% increase compared to the price level at the beginning of the month.

Raw Materials: Entering April, the situation in the Middle East remained fluid; consequently, market sentiment regarding the impact of geopolitical factors on Middle Eastern crude oil production and transportation became polarized yet generally more subdued. Signals of a potential ceasefire between the U.S. and Iran emerged repeatedly, causing the international crude oil price premium to rapidly shift—driven by expectations of diplomatic de-escalation coinciding with bearish market fundamentals. Shipping through the Strait of Hormuz resumed intermittently, while the IEA downgraded its supply-and-demand forecasts; simultaneously, API inventory data showed a sharp surge. The confluence of these multiple factors resulted in volatile crude oil price movements, leading to a loosening of long-term cost support for PP. Regarding propylene, scheduled maintenance shutdowns at various production facilities were concentrated within the month; while downstream demand remained steady, spot prices entered a phase of consolidation after having previously risen to high levels. As for propane, although port arrivals remained at low levels, overseas cargo prices underwent a downward correction in the middle of the month, while domestic spot prices generally remained firm. Overall, price trends for the various PP raw materials were mixed, resulting in a slight weakening of cost support for PP itself.

Supply: During the month of April, domestic PP manufacturers implemented a concentrated schedule of maintenance shutdowns, causing the overall industry operating rate to plummet to a historical low. Following the maintenance shutdowns initiated by eight companies—including Yulong Petrochemical and Zhejiang Petrochemical—at the end of March, the list of facilities undergoing maintenance or temporary shutdowns expanded in April to include additional players such as Jingbo, Sinochem Quanzhou, and Dongguan Juzhengyuan. In the latter half of the month, maintenance shutdowns continued at another eight facilities—including Jinneng Chemical, Yulong Petrochemical, and Sino-Saudi Tianjin—though seven other facilities, such as Zhenhai Petrochemical (Line 2) and Sinopec-SK (Zhonghan) Petrochemical, resumed operations. As of the time of writing, the overall operating load of the domestic industry stands at just over 60%. Current inventory levels exceed 760,000 tons, while the volume of imported material arriving at ports remains low. Taken together, the supply side is currently exerting relatively strong supportive pressure on spot market prices.

Demand: Influenced by the speculative price rally that occurred in March, PP prices had already reached elevated levels by the beginning of April; consequently, the overall trading atmosphere within the downstream sectors of the industry shifted toward a more cautious stance. During the first ten days of the month, refineries largely fulfilled their oversold contracts and orders placed during price rallies; subsequently, the pace of transactions slowed, and new position-building activities declined. Buyers mostly adopted a "buy-as-needed" approach, with transactions dominated by scattered, small-volume orders. Among end-users, small and micro-enterprises—some of which had previously curtailed or halted production due to high cost pressures—showed only limited signs of resuming operations, while large and medium-sized enterprises continued to maintain a steady pace of procurement. Overall, the demand side adopted a wait-and-see stance, performing below market expectations. Although some pre-holiday restocking activity emerged, the volume was limited, providing only moderate support to the PP market.

Market Outlook: Throughout April, domestic PP market prices are expected to undergo high-level consolidation. From a fundamental perspective, April marks the peak season for refinery maintenance; consequently, industry operating rates have bottomed out, and the volume of imported material arriving at ports remains low. However, given the large base of production capacity, supply remains sufficient to meet demand. Analysts at SunSirs (Business Society) believe that the current PP market is caught in a tug-of-war between bullish and bearish forces, with no clear directional guidance emerging. As upward momentum appears insufficient, the market is likely to continue in a phase of consolidation.

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