According to the Commodity Market Analysis System of SunSirs, the PP market has been weakly consolidated recently, with prices of various brand products experiencing a narrow decline. As of September 24th, the mainstream offer price for wire drawing by domestic producers and traders is around 7,571.43 RMB/ton, with a decrease of -2.75% compared to the beginning of the month.
In terms of raw materials: In terms of international crude oil, the previous peak oil season in the United States has ended, and the crude oil market was under pressure and fluctuated in the first half of September. The unexpected interest rate cut by the Federal Reserve after the holiday has affected the narrow rebound of oil prices, and the upstream support of PP in the far end still exists. The consumption of propylene has contracted due to the decrease in downstream production, resulting in poor shipment performance and limited improvement in market momentum. After the price fell, it consolidated and the wait-and-see sentiment intensified. In the early stage, domestic supply of methanol recovered, and prices fell narrowly. The price of propane is mainly sideways, with stable fundamentals and positive expectations for the future market. The strength of cost support for PDH production and methanol to PP production is mutually apparent. Overall, in mid September, various raw materials were struggling to support PP, with moderate strength.
In terms of supply: Recently, the load level of domestic PP enterprises has continued the pattern of large stability and small increase in the early stage. Some facilities resumed work around the weekend, and the industry load has narrowly increased to around 77%. The maintenance in the future market is relatively intensive, with maintenance plans from companies such as Daxie Petrochemical and Fujian United, resulting in an overall downward trend in supply. At present, the commercial inventory of PP in China is stable at over 760,000 tons, which has accumulated compared to before, and the on-site supply is abundant. Overall, the supply side provides average support for PP spot prices.
In terms of demand: The heating rate of the low PP demand side in September remained at a relatively slow level. The load on terminal enterprises has increased, and the consumption of woven bags such as fertilizers and cement has increased. The willingness of plastic weaving enterprises to build warehouses has also increased narrowly. However, orders from film companies have weakened to some extent due to the contraction of pre holiday stocking consumption. However, the macro commodity market sentiment has improved, and the market momentum has been boosted by it. The demand side still provides sufficient support for PP spot goods.
In late September, the domestic PP market prices were relatively weak. Fundamentally speaking, the comprehensive support of upstream raw materials for PP is average, and the consumption volume during the peak season continues to slowly rise. The Fed's interest rate hike also benefits macroeconomic drivers. The current positive market guidance still needs time to be implemented. With the National Day holiday approaching, there are expectations of holiday economy and policy guidance supporting the market, which is expected to alleviate the downward pressure on PP prices and even show signs of recovery.
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