SunSirs: Supply Contraction, China PP Market Increased in Late November

https://www.chemnet.com   Nov 29,2024 SunSirs

According to the Commodity Market Analysis System of SunSirs, the PP market fluctuated and rose in late November, with prices of some brand products increasing. As of November 28th, the mainstream offer price for wire drawing by domestic producers and traders is around 7,621.43 RMB/ton, a rise or fall of +0.57% compared to the price level at the beginning of November.

In terms of raw materials: In terms of international crude oil, although overall consumption has led to price fluctuations and a decline, the related geopolitical situation has suddenly become tense, and expectations for price fluctuations to rise are still high. The upstream driving force of PP in the far end is still acceptable. In terms of propylene, there has been an increase in domestic supply and the news of imported goods entering the port for fermentation. At the same time, propylene has already risen to a high level in the early stage, and buyers are becoming more cautious in their operations, resulting in price stagnation and consolidation. The upstream decline of propane has stabilized, market trading is average, and the cost of PDH production direction is stabilizing. Overall, in late November, PP raw materials were either stable or fluctuating, with average support on the cost side.

In terms of supply: In late November, the load level of domestic PP enterprises continued the downward trend from the previous period. Earlier this month, Zhejiang Petrochemical and Guangzhou Petrochemical, as well as Donghua Energy and CNOOC Shell, entered the plant maintenance plan in mid month. Recently, Hebei Haiwei and Lianhong Xinke production lines have undergone load reduction maintenance, reducing the overall industry load from 75% at the beginning of the month to below 68% at present. Domestic PP shipments have contracted significantly, while inventory levels have decreased by about 20,000 tons to 680,000 tons. Although the supply is still abundant, some sources of goods have experienced structural contraction. Overall, the supply side provides strong support for PP spot prices.

In terms of demand: In late November, the demand for PP remained stable with some weakness. Affected by seasonality, some industry enterprises have experienced a decline in production, and the consumption level of woven bags such as fertilizers and cement has narrowly declined, resulting in a cooling of their willingness to hold positions; The consumption of pipes in the early stage has slightly rebounded due to the stimulus of real estate related policies, and the positive effects have gradually dissipated recently; The consumption of BOPP film enterprises is strong, and the raw material reserves of terminal enterprises are generally stable with some increase. Overall, there are narrow fluctuations in various aspects of the demand side, which are generally weak and stable.

In late November, the domestic PP market prices fluctuated and rose narrowly. Fundamentally speaking, the overall performance of upstream raw materials in supporting PP is average. However, the supply side maintenance continued to be released within the month, and there was a tight supply situation in some parts of the market. However, according to consumer feedback, industry players are cautious about future terminal consumption and are concerned about the offline production of new capacity at the end of the year. Trading on the market is average and there has been no large-scale price chasing. In the short term, it is expected that PP prices will remain stable with some increase.

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