According to the Commodity Market Analysis System of SunSirs, the PP market experienced narrow fluctuations and consolidation in mid February, with prices of some brand products fluctuating. As of February 19th, the mainstream offer price for wire drawing by domestic producers and traders is around 7,520 RMB/ton, a decrease of -0.51% compared to the price level at the beginning of January.

In terms of raw materials:

In terms of mid month upstream crude oil, the recent geopolitical situation between Russia and Ukraine has eased, and market concerns about crude oil demand have expanded. In addition, the United States has imposed tariffs and Trump has requested OPEC to increase production to lower oil prices. Coupled with high US crude oil inventories, crude oil prices have been suppressed in multiple ways, resulting in a negative rate of change. The propylene sector is in a downward trend due to high prices at the beginning of the month and weak upstream conditions, while the propane sector also faces the risk of falling. Overall, the PP raw material market was weak and spread in mid February, making it difficult to obtain positive guidance on PP costs.

In terms of supply:

Recently, domestic PP enterprises have experienced significant fluctuations in their workload, and the market supply remains abundant. Overall, the industry's overall load level has slightly decreased by 1% to around 79% compared to the first ten days, with an average weekly production of about 750,000 tons in China. The expected decrease in PP shipment volume in the future is due to maintenance plans from companies such as Ningbo Fude, Jinneng Chemical, and Fujian Zhongjing. The supply side is expected to increase its support for PP spot prices.

In terms of demand:

The post holiday PP demand side shows a weak and stable pattern. In mid February, although there was no significant increase in volume on site, the enterprises gradually resumed work after the holiday and the load increased. The consumption level of woven bags such as fertilizers, cement, and rice has shown signs of recovery, and the inventory of plastic weaving enterprises has been partially digested. The buyer camp's stocking potential has expanded, and their willingness to purchase in the future has increased. Overall, the demand side is showing a positive trend.

In mid February, the domestic PP market prices fluctuated and stabilized. From a fundamental perspective, the overall performance of upstream raw materials in supporting PP is poor, and there is an expectation of a decrease in industry supply. There is a trend of recovery in consumption, and there is potential for an increase in market momentum. In the short term, it is expected that the PP price market may experience a rebound.

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