According to the Commodity Market Analysis System of SunSirs, the PP market in September was weak and consolidated, with prices of various brand products falling narrowly. As of October 1st, the mainstream offer price for wire drawing by domestic manufacturers and traders is around 7,592.86 RMB/ton, with a fluctuation of -2.48% compared to early September.
In terms of raw materials:
In terms of international crude oil, the market continued to fluctuate under pressure in early September, following the end of the peak oil season in the United States at the end of August. After the Mid Autumn Festival, the US Federal Reserve cut interest rates more than expected, which affected the narrow recovery of oil prices, and the remote upstream support of PP stabilized. The consumption of propylene has contracted due to the decrease in downstream production, resulting in poor shipment performance and limited improvement in market momentum. The wait-and-see sentiment in the market has intensified, leading to a significant drop in prices. 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 September, the support for PP from various raw materials was mixed and the strength was average.
Supply side:
In September, the load level of domestic PP enterprises continued to follow the pattern of large stability and small increase in the early stage, and the maintenance and resumption of work of enterprise equipment were intertwined. Ningbo Jinfa Second Line parking within the interval, Zhejiang Petrochemical and Dongguan JuzhengRMB resuming work. At the end of the month, maintenance plans are relatively intensive, with companies such as Daxie Petrochemical and Fujian United having maintenance plans, resulting in an overall downward trend in supply. The industry load has narrowly increased from 75% to around 77%. 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 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, the consumption of orders from film companies has been affected to some extent by the contraction of pre holiday stocking volume, and has weakened at the end of the month. 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.
Future forecast
The domestic PP market prices were weak in September. 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. It is expected that the downward pressure on PP prices may be resolved, and there may be a rebound after the National Day holiday.
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