SunSirs: China PP Market Shows Significant Stability and Small Movements in Mid November

According to the Commodity Market Analysis System of SunSirs, the PP market was generally flat in mid November, and the prices of various brands of products were basically stable. As of November 19th, the mainstream offer price for wire drawing by domestic manufacturers and traders is around 7,585.71 RMB/ton, with an increase or decrease of +0.09% compared to the price level at the beginning of November.

In terms of raw materials:

In terms of international crude oil, the change rate of crude oil remained negative in mid November due to the disturbance of the US presidential election. At the same time, the expectation of easing the geopolitical situation has led to a bearish support for the upstream of PP in the near future. The supply of propylene has been relaxed, coupled with news of new production capacity being put into operation domestically, leading to recent market fluctuations and consolidation. Although propane is suppressed by upstream trends, the inventory position is low, and the costs of propane and PDH production are stabilizing. Overall, the performance of PP raw materials in mid November was average, with moderate support on the cost side.

In terms of supply:

In mid November, the load level of domestic PP enterprises continued the downward trend from the previous period. Previously, the equipment maintenance of enterprises such as Zhejiang Petrochemical and Guangzhou Petrochemical has not yet been restored. Recently, Donghua Energy and CNOOC Shell also have plans for equipment maintenance, with more production line maintenance than resumption of work. The overall industry load has been reduced from 75% at the beginning of the month to around 74%. At present, the domestic PP inventory is stable at around 690,000 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:

In mid November, there was limited change in the demand side of PP, and the load of end enterprises generally flattened. The consumption level of woven bags such as fertilizers, cement, and rice remains stable, and the willingness to hold positions has cooled down narrowly; The inventory of raw materials in BOPP film enterprises has generally shrunk; The consumption of pipes has slightly rebounded due to the recent policy of lowering the real estate transaction tax. Overall, the demand side is struggling with hedging in various aspects and is generally weak and stable.

In mid November, the domestic PP market prices remained stagnant. Fundamentally speaking, the overall performance of upstream raw materials in supporting PP is average. However, supply side maintenance is concentrated, but according to market feedback, there are concerns among industry players about the release of new production capacity in the future. In the short term, the market is struggling with the game, and it is expected that PP prices will continue to consolidate and operate.

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