According to the Commodity Market Analysis System of Shengyi Society, the domestic PP market fluctuated and fell in July, with some brand products experiencing price reductions. As of July 31st, the mainstream offer price for wire drawing by domestic manufacturers and traders is around 7278.33 yuan/ton, a decrease of -2.41% compared to the price level at the beginning of July.
price trend
In terms of raw materials:
During July, the geopolitical situation in the Middle East shifted from tension to easing, and the announcement of OPEC+production plans put pressure on international oil prices. At present, the market’s concerns about the risk of crude oil supply interruption have eased, and price fluctuations and consolidation are the main focus. At the same time, the consumption of propane is sluggish, and it has followed the previous decline of crude oil. The current price position is not high, and the cost support for PDH manufacturing enterprises has fallen. In the early stage of propylene production and resumption of work, the market is under pressure and declining. Overall, the prices of PP raw materials in July provided weak support for costs.
Supply side:
In July, there was a mutual occurrence of maintenance and resumption of work in domestic PP enterprises, as well as the release of production capacity. Jingbo, Yanchang middling coal, Dalian Petrochemical, Tianjin Bohai Chemical and other enterprises have reduced the burden. On the other hand, the fourth line of Zhenhai and the fourth line of Yulong were put into operation, the load of Zhejiang Petrochemical, Quanzhou Guoheng and Jiutai Group was increased, and the drive of middling coal Mengda was near. Overall, the overall industry load level within the range fluctuates narrowly around 77%, with an average weekly total output of around 770000 tons. The supply of goods remains abundant, and the inventory level is gradually rising to over 810000 tons, with slow digestion. About 500000 tons of new production capacity will be put into operation in the second half of the year, severely limiting the long-term supply pattern. Overall, the improvement in support for spot prices from the PP supply side is very limited.
In terms of demand:
July is the traditional off-season for polypropylene consumption, and the demand for PP continues to be weak, resulting in a quiet trading atmosphere on the market. Merchants have hardly seen any advance stocking operations, and the on-site situation remains in a state of urgent need, with a focus on on-demand use. In terms of plastic weaving, the consumption level of terminal enterprises is particularly obvious in the off-season, and downstream PP enterprises in China are struggling to start production. Materials used in construction, agriculture and other fields are also at a low level and flat. On site new orders tend to be scattered small orders and contract deliveries, with flat liquidity of supply and slow release of PP demand. At present, the macro guidance is not clear, and in the pattern of weak exports and domestic demand, the demand side of PP has poor support for spot prices.
Future forecast
The domestic PP market prices fluctuated and fell in July. Fundamentally speaking, the overall strength of upstream raw materials is weak, and their overall support for PP is poor. The industry load is stable with small fluctuations, and there is an expectation of abundant supply in the future. Consumption is at a low season level. The contradiction between supply and demand and the decrease in cost value are combined, and the mentality of operators is bearish. It is expected that the PP market will continue to be stagnant in the short term.
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