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SunSirs: Demand Drops at the End of Peak Season, China PP Market Drops after Rising in October

November 01 2022 11:37:31     SunSirs (Selena)

According to the data monitored by SunSirs, the PP market rose and fell in October, and the spot prices of wire drawing brands were lowered. As of October 31, the mainstream offer price of domestic producers and traders T30S (wire drawing) was about 7,925 RMB/ ton, up or down by -2.86% compared with the average price at the beginning of the month.

Industrial chain: upstream, upstream. In October, the domestic propylene market went from up to down, and the international oil price fell continuously. The cost support was weak. In this month, the propylene enterprise has the possibility to resume production of maintenance units, and new units are expected to be put into production. The supply is increasing, and the on-site inventory is increasing. In terms of demand, the load of terminal enterprises decreased by a narrow margin, the market trading atmosphere was not positive, and the factory took the lead in reducing the factory price to stimulate the delivery of goods. At present, the supply of propylene market is loose and the demand is weak. It is expected that the short-term market will be mainly weak.

The propylene price fell, while the far end raw oil market also fell. In October, PP cost side support weakened. In terms of industry load, the maintenance scale of PP polymerization enterprises has gradually decreased this month, with enterprises returning to work following up, and there are news of new production, but most of them are concentrated at the end of the year. At the end of the month, the construction began to decline slightly, and the pressure on the supply side was fair. In terms of inventory, by the end of this month, the two barrels of oil had been stored at more than 600,000 tons, down from the middle of this month, and the social inventory was about a fifth lower than that of the same period last year. In terms of demand, in the traditional peak demand season of this month, seasonal digestion and stocking operations were less than expected, and the downstream product market was poor, among which the stocking of plastic weaving enterprises and BOPP enterprises was generally less than that of previous years. In addition to the negative impact of global macroeconomic prospects and imported inflation, the market mentality is empty, and businesses generally follow the trend.

In terms of fiber materials, according to the data monitored by SunSirs, as of October 31, the spot price of domestic fiber PP fell on the whole. The mainstream offer price of domestic producers and traders of Z30S (fiber) is about 8,033.33 RMB/ ton, up or down by -2.03% compared with the average price at the beginning of the month and -9.91% year-on-year. In October, the load of downstream non-woven enterprises, the main part of PP fiber material, increased by a narrow margin, the profit of spunbonded non-woven fabrics was average, and the demand of terminal enterprises was stable. The digestion speed of nonwoven end products is average. Generally speaking, the periodic consumption support is still in place. The enterprise prefers to just take the goods for fiber PP replenishment. The delivery and delivery of fiber materials in the site are ordinary. At present, the fiber material market has been bottomed by the demand side, while the raw material support is insufficient, and the site is empty. In the short term, it may still maintain the shock adjustment operation.

In terms of melt blown materials, the melt blown PP market in October ran in shock. As of October 31, the average quotation of domestic melt blown material sample enterprises monitored by SunSirs was about 9016.67 RMB/ ton, up or down by -0.92% compared with the average price at the beginning of the month, and - 9.08% year-on-year. In terms of international health events, the current situation in various countries is still not optimistic, and the epidemic situation in China's neighboring countries has rebounded recently. In October, some parts of China rebounded slightly, but the overall epidemic prevention pressure was not great. Early warnings were issued at the end of the month, but the pulling effect on medical melt blown fabric materials was limited. The domestic and foreign demand has not significantly helped, and the support for spot prices is poor. There is abundant supply of melt blown materials in the market, and domestic melt blown materials and cloth enterprises generally start construction, but the saturation is high. Melt blown materials are mainly affected by the negative cost side, and it is expected that the short-term market will be dominated by narrow amplitude shocks.

SunSirs PP analysts  believed that: the polypropylene market fell after rising in October, the raw propylene market was weak, the far upstream crude oil fell, and the PP cost side support weakened. The terminal enterprises just need to pick up the goods. Although the demand is not as expected in the traditional peak season, it still plays a supporting role in the stage. The buyer's operation became more cautious, and the trading in the market gradually declined. However, the total inventory position of PP fluctuated and decreased at the end of the month. It is expected that China PP market will still stabilize in the short term.

 

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