SunSirs: Cost Side Ups and Downs are Intertwined, China PP Market slightly Rises in March

https://www.chemnet.com   Mar 29,2024

　　According to the Commodity Market Analysis System of SunSirs, the PP market fluctuated in March, with prices of various wire drawing brands increasing narrowly at the end of the month. As of March 27th, the mainstream quoted price for T30S (wire drawing) by domestic producers and traders is around 7,764.29 RMB/ton, up or down +0.74% from the beginning of the month.

　　Industry chain: In terms of PP raw materials, the international crude oil market fluctuated and rose in March, gradually warming the support for the cost side of oil to PP production. The trend of downstream propylene driven by crude oil in the first half of the month is still good, but in the latter half of the month, the circulation of goods was slow, and prices fell broadly, providing loose support for propylene to PP production. The methanol market is relatively stable, but due to weak demand, market prices have fallen, which has loosened support for PP. In terms of PDH, propane recovered after falling, and the price remained relatively stable at the end of the month. Upstream raw materials fluctuate, with crude oil being the main support for the PP cost side.

　　Overall, the raw material market is generally stable, and there is still support for the PP cost side. The industry load fluctuated narrowly, with an average load of around 76% this month. At the end of the month, there were some production line maintenance plans, and coupled with the situation where new production capacity was not fully implemented in March, the market supply did not reach the expected level. At the same time, the overall inventory position decreased at a high level within the month, and there was no significant supply pressure in the market. In terms of demand, the load of terminal enterprises is generally stable and small, with downstream PP enterprises such as plastic weaving, film materials, and injection molding having comprehensive operating rates of about 40%, 64%, and 56%, respectively. The replenishment operation of enterprises is average, and the trading atmosphere on the market is not strong. The overall market for wire drawing materials is affected by the positive impact of cost and supply not meeting expectations, and the market is warming up at the end of the month.

　　In terms of fiber materials, according to the commodity market analysis system of SunSirs, as of March 27th, the spot price of domestic fiber PP has also increased. The mainstream quoted price for domestic producers and traders of Z30S (fiber) is around 7,637 RMB/ton, with an increase or decrease of 1.66% compared to the average price at the beginning of the month, and a decrease of 1.29% compared to the same period last year. During the month, the main downstream non-woven fabric enterprises of PP fiber materials saw a low load increase, and the operating rate increased from 15% at the end of February to the current 26%. The load on end enterprises has increased, and the market for non-woven fabric contracts has risen. The digestion speed of end products is average, and the main support for fiber material prices comes from the cost side. It is expected that the fiber material market will continue to consolidate.

　　In terms of melt blown materials, the melt blown PP market remained stable and organized this month. As of March 27th, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of SunSirs is about 8,012.50 RMB/ton. Compared with the average price level at the beginning of the month, the increase and decrease is +0.16%, with a year-on-year decrease of 7.37%. At present, the demand for facial protection in China is generally high, and the consumption of medical melt blown fabric materials is not significantly driven. There is also no significant boost in domestic and foreign demand. In addition, downstream factories have a low load, resulting in new orders leaning towards loose orders. It is expected that the melt blown material market will continue to be weak and stable.

　　PP analysts from SunSirs believe that the polypropylene market fluctuated and stabilized in March, with prices rebounding narrowly at the end of the month. The overall trend of upstream raw materials is stable with some increases, and the support from the cost side for the market is still acceptable. The tightening of PP supply at the end of the month is expected to provide some supply side benefits. But terminal enterprises operate steadily, stock up is necessary to maintain production, and on-site trading is average. It is expected that the PP market will remain strong in the short term.

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