The domestic PP market stabilized first and then fell in June. The prices of various brand products have significantly decreased. As of June 30th, the benchmark price for PP drawing offered by Shengyi Society was 7566.67 yuan/ton, a decrease of 20.96% from the beginning of the month.
price trend
In terms of raw materials:
In June, there were frequent positive signals of high-level peace talks between the United States and Iran in the Middle East. Although it will take some time for shipping in the Strait of Hormuz to fully recover, the market predicts that the Middle East is easing and the geopolitical premium will quickly clear. The international crude oil market has broken through and fallen, causing the collapse of PP’s remote cost value. The propylene sector fell synchronously due to its drag, coupled with the restart of enterprise facilities last month, which increased on-site supply and suppressed spot prices, resulting in a sharp decline in the market in the second half of the month. Overall, the PP raw material market has experienced a significant decline, which has a negative impact on the cost of PP.
Supply side:
In June, some domestic PP companies still implemented maintenance plans, resulting in a decrease in overall operating rates. As of the time of writing, the overall load of the domestic industry is about 65%, and the weekly output is less than 680000 tons. The current inventory position is around 580000 tons, and the overall supply of goods is abundant, but there are plans to increase the return of equipment in the future. Overall, the supply side has average support for spot prices.
In terms of demand:
The current consumption of polypropylene is at a low season level, and downstream markets in the industry are still resistant to high prices. In addition, the market is in a downward channel, and buyers are buying up rather than down, resulting in a cautious overall trading atmosphere. Terminal enterprises can pick up goods as needed, and the warehouse construction operation is average, often resulting in scattered small orders that can be picked up as needed. The improvement in operating rates for small and micro enterprises is limited, while large and medium-sized enterprises continue to stabilize and acquire goods. The overall demand side is in a wait-and-see situation, with poor support for PP.
post-market forecast
In June, the domestic PP market prices stabilized in the first half of the month and fell below the market level in the second half. From a fundamental perspective, there has been a significant drop in the cost side, and although the industry load remains low, there has been limited change in the supply of port imports to the port. But the demand side has entered the off-season market, and it is difficult to increase volume in the short term. Under the contradiction between supply and demand, the market has abundant spot resources. Business Society PP analysts believe that the current PP market is weak in both supply and demand, with cost values collapsing and insufficient upward momentum in the future. The market may still be in a downward channel.
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