According to the commodity market analysis system of SunSirs, the PP market experienced narrow fluctuations in June, with prices of various brand products stabilizing slightly. As of June 30th, the mainstream offer price for wire drawing by domestic producers and traders is around 7,992.86 RMB/ton, up or down +0.36% from the price level on June 1st.

In terms of raw materials:

At the beginning of this month, international crude oil continued to strengthen due to OPEC+production reduction expectations and the impact of the peak summer fuel consumption season in the United States. As a result, oil prices continued to rise, providing stronger support for the PP market. In terms of propylene prices, there has been a mid month pullback and an overall increase. The downstream replenishment of propane held up, but it heated up and stabilized after a decline. The cost guidance for PP within the month mainly comes from the remote cost of crude oil. Overall, the support for PP from various raw materials is relatively strong.

In terms of supply:

In early June, the load level of domestic PP enterprises continued to reach an average of 70% by the end of May. Resumption of work and maintenance within the month occurred simultaneously, and the operating rate fluctuated slightly. At the end of the month, the industry's operating rate was around 74%. Although there has been a narrow increase in production, the increase in inventory is not significant, and the factory pricing of enterprises is mainly stable. The current on-site supply of goods remains abundant, and the supply pressure has increased narrowly compared to the beginning of the month. Overall, the supply side's support for PP is average.

In terms of demand:

In June, the demand side of PP showed a slight decline, and the load on end enterprises remained generally stable. The comprehensive operating rates of downstream PP enterprises such as plastic weaving, film materials, and injection molding are about 42%, 65%, and 56%, respectively, and have basically remained stable. In the early stage, the macro market of industries such as real estate was relatively strong, and the expected positive news was phased out. The demand for pipes was weak. The trading atmosphere in the market is average, with limited new orders, mostly for pre delivery contracts. The replenishment operation of enterprises is mainly based on demand, and there has been no increase in on-site consumption. The demand side has not provided sufficient support for the PP market.

Future Market Forecast

The current domestic PP market prices are experiencing narrow fluctuations and are operating in a stalemate. The comprehensive support for upstream raw materials is strong, while PP demand is entering the off-season. The pressure of cost and demand has led to an increase in the willingness of enterprises to actively reduce negative debts, and there is a trend of both supply and demand weakening in the market. In summary, it is expected that the PP market will remain stagnant and operate weakly in July. It is recommended to closely monitor the supply side device trends.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.