According to the Commodity Market Analysis System of Shengyi Society, the PP market was weak in early September, with prices of various brand products experiencing a narrow decline. As of the afternoon of September 10th, the mainstream offer price for wire drawing by domestic producers and traders was around 7678.57 yuan/ton, with a decrease of -1.38% compared to the beginning of the month.
Price trend
In terms of raw materials:
In terms of international crude oil, the current market continues to follow the end of the peak oil season in the United States at the end of August, and the decline in oil prices has affected the loosening of the upstream of PP in the far end. However, due to the expectation of interest rate cuts by the Federal Reserve and the postponement of OPEC+’s production plans, there are still opportunities for a rebound in the future. There is significant pressure on propylene shipments in the early stages, with limited improvement in market momentum, and there is still a recent decline. The price of propane is consolidating weakly, while the domestic supply of methanol has recovered, leading to a decline in the first half of the year. The cost support for PDH and methanol to PP production has weakened. Overall, in early September, the support of various raw materials for PP has cooled down.
Supply side:
In the first ten days, the load level of domestic PP enterprises continued the pattern of large stability and small fluctuations in the early stage, and the industry load remained stable at around 75% within ten days. The maintenance of enterprise equipment and resumption of work are intertwined, and the supply is trending towards a flat trend. At present, the commercial inventory of PP in China is stable at around 720000 tons, and the supply is generally abundant. Some enterprises in the southern and central regions of China have maintenance plans in the future, and there is an expectation of narrow supply contraction. Overall, the supply side provides sufficient support for PP spot prices.
In terms of demand:
The heating rate of PP demand side in early September was relatively slow. The load on terminal enterprises has increased, and the consumption of woven bags such as fertilizers and cement has initially increased. The willingness of plastic weaving enterprises to build warehouses has also increased. At the same time, the follow-up range of film companies and injection molding orders also followed suit. However, the weak market trading economy and intense macro bearish news may affect the confidence of downstream enterprises in the future. The demand side has limited support for PP spot goods.
Future forecast
In early September, the domestic PP market prices were relatively weak. From a fundamental perspective, the comprehensive support of upstream raw materials for PP has weakened, and the rise in consumption at the beginning of the peak season has not yet provided sufficient support for PP spot prices. The current market guidance is not yet clear, and under the influence of macroeconomic and upstream weakness, whether the demand for “Golden September” can further expand is the key to revitalizing the market sentiment in the future.
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