According to the Commodity Market Analysis System of SunSirs, the PP market rose and then fell back in October, and the price levels of various brand products basically fell back to the beginning of the month. As of October 31st, the mainstream offer price for wire drawing by domestic manufacturers and traders is around 7,585.71 RMB/ton, a decrease of -0.09% compared to the price level on October 1st.
In terms of raw materials: In terms of international crude oil, there was a significant surge during the National Day holiday, and the market was booming. But as consumption becomes increasingly weak, the market is turning into a weak pressure. At the end of the month, international crude oil futures fell sharply, and the upstream support of PP fell back. On the other hand, the contraction of propylene supply is favorable for the market, but with the gradual caution in chasing high consumption, there will be a slowdown in the increase at the end of the month accompanied by a narrow correction. Domestic supply of methanol has recovered in the early stage, but there is a lack of strong support on the supply and demand side, and prices are running at a stalemate. Previously, the price of propane was relatively stable due to internal low and external high pulling each other. Overall, the prices of PP raw materials fluctuated in October, with moderate support on the cost side.
In terms of Supply: Since October, the load level of domestic PP enterprises has been reduced due to the implementation of equipment maintenance plans by some enterprises. In the first half of the month, companies such as Guangzhou Petrochemical, Hainan Refining and Chemical, and Daxie Petrochemical all had equipment maintenance plans. In the second half of the month, companies such as Jinergy Chemical and Zhongjing Petrochemical also had some equipment undergoing maintenance. The maintenance production lines were concentrated in the southern region of China, and the overall industry load fluctuated from 77% at the beginning of the month to around 76.5%. At present, the inventory of two barrels of PP oil in China is stable at around 765000 tons, which has decreased compared to the previous period. But the supply is still at a sufficient level. Overall, the supply side provides sufficient support for PP spot prices.
In terms of demand: The demand for PP has only slightly increased in October, and the load on end enterprises has slightly risen. The consumption of woven bags such as fertilizers, cement, and rice continues to increase, while the storage capacity of plastic weaving enterprises generally decreases, and the willingness to build warehouses has increased. In terms of fiber materials, due to the cooling weather, downstream consumption of PP non-woven fabrics has also rebounded, which has to some extent boosted the demand for this type of PP material. However, with the improvement of macro commodity market sentiment and the exhaustion of positive factors, chasing high orders has returned to caution, and the market momentum has stopped heating up due to its impact. The demand side's support for PP spot goods is not outstanding.
The domestic PP market price rose in October and then fell back. Fundamentally speaking, the comprehensive support of upstream raw materials for PP is average, and the demand side is slowly heating up. However, the increase in the first half of the month to some extent suppressed market trading in the second half, coupled with the weakening of the impact of loose funding policies and the negative impact of industry expansion in the fourth quarter. In the short term, the recent positive news is focused on the increase in e-commerce consumption, and it is expected that PP prices may be able to stabilize and enter a consolidation operation.
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