According to the Commodity Market Analysis System of SunSirs, the PP market in August saw more declines than gains, with prices of various product brands experiencing a narrow decline. As of the afternoon of August 31st, the mainstream offer price for wire drawing by domestic producers and traders was around 7,785.71 RMB/ton, with a decrease of -0.55% compared to the beginning of the month.
In terms of raw materials:
In terms of international crude oil, at the beginning of the month, due to the unexpected decline in US crude oil inventories and the escalating situation in the Middle East, many industry players were bullish. However, the International Energy Agency's monthly report predicts a slowdown in global oil demand, coupled with market concerns about the macroeconomic situation of economic recession, leading to a stagnant and volatile oil price in August. The propylene sector has fluctuated and rebounded within the month, but downstream enthusiasm for receiving goods has declined after the price rises, and the speed of supply circulation has slowed down. After the price of propane rose, it consolidated, and at the same time, some external demand for methanol was released at the end of the month, providing strong cost support for PDH and methanol to PP production. Overall, the support for PP from various raw materials in August was still acceptable.
In terms of supply:
In August, the load level of domestic PP enterprises continued the previous pattern of large stability and small fluctuations, and the industry's monthly load remained stable at around 75%. The maintenance of enterprise equipment and resumption of work are intertwined, and there will still be some equipment returning in the future, with an increasing trend in supply. In the first and middle of the month, PP inventory increased, leading to a decrease in factory pricing and inventory turnover. At the end of the month, inventory pressure slightly eased, and manufacturers returned to price adjustment operations. Overall, the current on-site supply of goods remains abundant, and supply pressure still exists.
In terms of demand:
The demand for PP in August is difficult to improve, and the load on end enterprises is generally low, with a narrow rebound in the latter half of the year. The consumption of woven bags such as fertilizers and cement is still at the off-season level, and the operating rate of plastic weaving enterprises is low, with weak enthusiasm for replenishing inventory. At the end of the month, film companies are following up on downstream product orders, and replenishment operations are relatively strong in terms of demand. The comprehensive operating rate of injection molding enterprises also increased at a low level in the latter half of the year. However, the trading atmosphere in the downstream PP market during the peak season has not yet begun, and there is a lack of decisive guidance signals in the market within the month. The demand side has average support for the PP market.
After the domestic PP market prices fell in August, there was a slight recovery. Fundamentally speaking, the comprehensive support of upstream raw materials for PP is still acceptable, and the overall demand side still maintains a low season pattern. There is a trend of increasing supply and demand in the future, and the sentiment of spot trading at the end of the month has not yet been activated by the expected peak demand season in September, with on-site transactions maintaining a low-end position. However, as we enter the traditional peak season, the PP market may experience a short-term increase driven by consumption. It is recommended to closely monitor the resumption of work and procurement situation of end enterprises.
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