SunSirs: Cost Side Weakness, China PP Market Rose first and then Fell in November

https://www.chemnet.com   Dec 07,2023 SunSirs

　　According to the commodity market analysis system of SunSirs, the PP market in November first rose and then fell, with prices of various wire drawing brands fluctuating. As of December 1st, the mainstream quoted price for T30S (wire drawing) by domestic producers and traders is around 7,650 RMB/ton, with a decrease of -1.29% compared to the average price level in early November.

　　Industry chain: In terms of PP raw materials, at the beginning of the month, market confidence was strengthened due to the impact of the third quarter economic data and external inflation easing signals, and upstream support for PP increased. But with the impact of Russia's tariff adjustment and OPEC's production reduction in the second half of the month, international crude oil prices have fallen, along with a decline in propylene prices. Due to the rising transportation costs of natural gas and propane, the price of PDH has increased. The methanol market is relatively stable. Upstream raw materials fluctuate, with overall support for PP initially increasing and then decreasing.

　　The direction of raw materials varies, and the cost side shows a weakening trend in supporting PP. In terms of industry load, although there were new production units in the polypropylene industry in November, some enterprises had unplanned maintenance, with an average load of around 77%, a decrease from October. The overall supply of goods is abundant, and it is expected that there will be a stable increase in production in the future, but the magnitude is not significant, and the pressure on on-site supply will remain. In terms of demand, downstream plastic weaving production is maintained at around 45%, while the production rate of film materials and injection molding enterprises is maintained at over 60%, and the overall position remains stable. Terminal enterprises maintain cautious operations in purchasing goods, with average trading activity on the exchange, and the overall market for wire drawing materials has initially increased and then decreased.

　　In terms of fiber materials, according to the commodity market analysis system of SunSirs, as of December 1st, the domestic spot price of fiber PP also rose first and then fell. The mainstream quoted price for domestic producers and traders of Z30S (fiber) is around 7612.50 RMB/ton, with an increase or decrease of -0.81% compared to the average price at the beginning of the month, and a decrease of 4.84% compared to the same period last year. In November, the main downstream non-woven fabric enterprises of PP fiber materials saw an increase in load, with an operating rate level close to 39%. The digestion speed of end products has accelerated due to the frequent occurrence of influenza, and the demand for fiber materials in the market has only slightly increased. The price of non-woven fabrics follows the market trend. It is expected that the market for fiber materials will continue in the short term, and it is recommended to closely monitor the domestic supply and demand situation.

　　In terms of melt blown materials, the melt blown PP market in November saw a narrow decline after consolidation. As of December 1st, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of SunSirs is about 8,237.50 RMB/ton. Compared with the average price level at the beginning of the month, the increase and decrease is -1.35%, with a year-on-year decrease of 8.47%. At present, the demand for facial protection in China has not increased significantly, and the impact of seasonal climate on the consumption of medical melt blown fabric materials still needs to be transmitted for a while. There is also no significant boost in domestic and foreign demand. It is expected that the melt blown material market will maintain a narrow consolidation trend.

　　PP analysts from SunSirs believe that the polypropylene market rose first and then fell in November. The trend of upstream raw materials fluctuates, and the cost side provides support for the market from high to low. Terminal enterprises maintain the initial level of production, and their procurement operations tend to be biased towards rigid demand. The new production of PP equipment in the second half of the month is on par with the temporary inspection. The current PP fundamentals are bearish, and it is expected that the PP market will maintain a narrow and weak operation in the short term. It is recommended to closely monitor international crude oil related news.

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