SunSirs: Poor Market Momentum, PP Weakened Slightly in mid-August

https://www.chemnet.com   Aug 23,2024

According to the commodity market analysis system of SunSirs, the PP market continued to consolidate in mid-August, and the prices of various grades of products fell narrowly. As of the afternoon of August 21, the mainstream offer price of wire drawing by domestic manufacturers and traders was around 7757.14 RMB/ton, a decrease of -0.91% from the beginning of the month.

Price trend

Raw materials:

The International Energy Agency's monthly report in the first half of the month predicted that global oil demand growth will continue to slow to less than 1 million barrels/day in the next two years, which suppressed the market atmosphere. Although the previous US inventory fell beyond expectations and the tension in the Middle East heated up, the market still stagnated and weakened in the middle of the month. The supply circulation speed of propylene is average, and the price has generally declined. Propane is also weak in demand due to pessimistic purchasing sentiment in the downstream, and there is room for price relaxation. Overall, the support of various raw materials for PP is average in the near future.

Supply:

In mid-August, the load level of domestic PP enterprises continued the previous stable and small fluctuation pattern. Recently, the maintenance and resumption of work of enterprises have occurred alternately, and the supply volume has leveled off. The current industry load is about 75%, and there is news of new equipment commissioning at the end of the month, and the output level in the future market is expected to increase. At the same time, the overall polyolefin inventory of the two oil companies fluctuated and rose, and the ex-factory pricing of enterprises was slightly lowered. On the whole, the current supply in the market remains abundant, and the supply pressure is stable and rising.

Demand:

In mid-August, there was no improvement in the demand side of PP, and the load of terminal enterprises generally remained stable at a low level. Among them, the consumption of woven bags such as fertilizers and cement is at the off-season level, the operating rate of plastic weaving enterprises is low, and the enthusiasm for replenishment is not strong. The follow-up of downstream product orders for film enterprises is limited, and the replenishment operation revolves around weak rigid demand. The comprehensive operating rate of injection molding enterprises is also low and has fallen. The trading atmosphere in the downstream PP market is general, with limited new orders, mostly pre-delivery contracts. Although the traditional peak season of "Golden September" is approaching, the market lacks guidance signals in the short term, and the demand side does not support the PP market well.

Market outlook

Recently, the domestic PP market price is still falling slightly. From a fundamental perspective, the upstream raw materials are weak in supporting PP, and the off-season demand is difficult to change. At the same time, the supply and demand in the future market are increasing. The current spot quotation sentiment has not been revitalized by the peak demand season next month, and the new orders in the market remain at a low end. In summary, it is difficult for the PP market to make a breakthrough in the short term, and it may be mainly in a consolidation mode.

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