According to the Commodity Market Analysis System of SunSirs, the PP market experienced a narrow range of fluctuations in early July, with prices of various brand products stabilizing slightly. As of the afternoon of July 9th, the mainstream offer price for wire drawing by domestic producers and traders is around 7,985.71 RMB/ton, which is the same as the price on July 1st.
In terms of raw materials: Recently, international crude oil prices have continued their previous high levels, and the market has taken on the positive news of OPEC+ production cuts and the impact of the peak summer fuel consumption season in the United States. The high oil prices have fluctuated horizontally, providing strong support for the PP market. The circulation speed of propylene has slowed down, but the overall price has remained stable and slightly decreased due to the support of crude oil. Due to the expectation of higher prices for liquefied gas, propane has been driven and prices have increased, resulting in a positive trend in the production of PDH. Overall, the recent cost guidance for PP still comes from the remote cost of crude oil, and the support for PP from various raw materials is still acceptable.
In terms of supply: In early July, the load level of domestic PP enterprises was 70% higher than the average operating level at the end of June. Some devices have undergone short repairs within ten days, with limited changes in operating rates. The industry operating rate has fluctuated and adjusted around 71%. Although there has been a narrow increase in production, there has been no increase in inventory, and the factory pricing of enterprises has remained stable. The current on-site supply of goods remains abundant, with supply pressure fluctuating. Some production lines are still resuming work in the future, and it is expected that there will be an increasing trend in on-site supply.
In terms of demand: In early July, the demand side of PP performed poorly, and the load on end enterprises remained generally stable. Among them, the consumption of woven bags such as fertilizers and cement is at the off-season level, while the operating rate of plastic weaving enterprises is relatively low at 41%, and the enthusiasm for replenishment is not strong. Due to high raw material prices, slow cost transfer, and low profit margins, the replenishment operation of film companies revolves around rigid demand. The comprehensive operating rate of injection molding enterprises is 56%, basically stabilizing. The trading atmosphere in the downstream market of PP is average, with limited new orders and mostly pre delivery contracts. The demand side creates a certain drag on the PP market.
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, but the demand for PP is at the off-season level. The tug and tug between cost and demand has basically smoothed out the long and short positions in the short term. The supply and demand trend in the future market is stable with some increases, and there may be limited improvement in the consumption pattern. Overall, it is expected that the PP market will remain stagnant in mid July.
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