Cost weakening&low demand, weak PP market

According to the Commodity Market Analysis System of the Business Society, the PP market has fluctuated after a decline this week, with overall reductions in various wire drawing brands. As of May 26th, the mainstream quoted price of T30S (wire drawing) by domestic producers and traders is around 7057.14 yuan/ton, with an increase or decrease of -8.43% compared to the average price level at the beginning of the month.

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Cause analysis


Industry chain: On the upstream side, the propylene market in Shandong has continued to decline recently. Due to the sluggish demand market and a significant increase in upstream inventory, factories have continued to reduce prices and inventory to stimulate sales. However, the demand increase is limited, and downstream procurement is cautious, creating a strong wait-and-see atmosphere. It is expected that there will be no significant improvement in downstream demand in the short term, and the propylene market will maintain a weak trend.


The rapid decline in propylene prices has weakened the cost support for PP. In terms of industry load, the overall industry load remained at around 76% this week. Recently, there have been too many maintenance devices, but the overall supply of goods has remained stable. There is sufficient supply of goods on the site, with a narrow decrease in inventory pressure, and there is not significant support from the supply side for spot prices. In addition, the production of multiple new devices has been delayed, and there may be an expected increase in concentrated supply next month. In terms of demand, the downstream plastic weaving production of the main force has stabilized, and the operating rate of film materials enterprises continues to recover. The improvement of end enterprise stock situation is limited, and procurement is mainly focused on maintaining production.


In terms of fiber materials, according to the Commodity Market Analysis System of Business Society, as of May 26th, the spot price of domestic fiber PP has declined. The mainstream quoted price of domestic producers and traders for Z30S (fiber) is around 7187.50 yuan/ton, which is a decrease of -6.66% compared to the average price at the beginning of the month, and a decrease of 18.63% compared to the same period last year. This week, the low load of downstream non-woven fabric enterprises, the main force of PP fiber material, continued horizontally, with an overall operating rate of around 30%. The current weak demand for fiber materials on the site is dragging down the digestion speed of non-woven end products, and the enterprise’s efforts to replenish fiber PP are lagging behind. In addition, the negative macro impact on demand elasticity predicts that fiber materials may continue to be affected by supply-demand conflicts and maintain a weak and stable pattern in the short term.


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In terms of melt blown materials, this week’s melt blown PP market continued to be weak and consolidated. As of May 26th, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of the Business Society is about 8175 yuan/ton. Compared with the average price level at the beginning of the month, the price has increased or decreased by -0.91%, with a year-on-year decrease of 16.58%. At present, there have been sporadic rebounds in domestic health incidents, but local news in society is unable to drive the consumption of medical meltblown fabric materials. The overseas demand has also not shown significant support, and traders have given up on orders, indicating that the melt blown material market may maintain a weak consolidation trend.


Future Market Forecast


PP analysts from Business Society believe that the polypropylene market has recently declined. The raw material propylene market has turned down, and the support from the cost side for the market is not good. Terminal enterprises tend to maintain production while receiving goods, with weak demand release. The decrease in market orders, coupled with news of new device production in the future, is expected to maintain a weak PP market in the short term.

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