According to the Commodity Market Analysis System of Shengyi Society, the domestic PP market weakened in early September, with most brand products experiencing narrow price reductions. As of September 9th, the mainstream offer price for wire drawing by domestic producers and traders is around 7113.33 yuan/ton, a decrease of -0.93% compared to the price level at the beginning of September.
price trend
In terms of raw materials:
At the beginning of September, the geopolitical situation in Eastern Europe and the Middle East maintained a relaxed pattern, and the market expected stable crude oil supply. Meanwhile, OPEC+continues to increase production, causing international oil prices to fluctuate downward. In the first half of the year, the supply of propylene was affected by the maintenance of Haiwei, resulting in a contraction. However, due to sufficient on-site supply, the resistance to price increases is relatively high. In addition, the downstream demand is generally followed up, and the price situation is mainly stagnant. Propane has been boosted by high external prices, and the short-term bottoming force is relatively strong. Prices are temporarily stable, and the cost support for PDH manufacturing enterprises has flattened. Overall, the prices of various PP raw materials provide average cost support.
Supply side:
In early September, the operating rate of domestic PP enterprises remained high and stable. As of the time of writing, the overall load level of the domestic industry is around 80%, which is basically unchanged from the end of August, and the weekly average total output is also flat at 810000 tons. Recently, the first line of the 900000 ton new production line in Ningbo Daxie Phase II has been put into operation with 450000 tons. The trend of loose market supply is clear, which seriously limits the support of the supply side. The current on-site supply remains abundant, and inventory levels have significantly rebounded to over 830000 tons. Overall, the PP supply side has poor support for spot prices.
In terms of demand:
At the beginning of September, polypropylene was in the transition period between peak and off peak seasons, and traders had expectations for a surge in PP demand. However, the trading atmosphere in the field remained light. Merchants have started stocking up slowly, and new orders on site still tend to be mainly scattered small orders and contract deliveries. The improvement of source liquidity is limited. The median load of downstream enterprises has leveled off, and the potential willingness to build warehouses for materials in areas such as plastic weaving, construction, and agriculture is unclear. PP peak season consumption has not yet started, providing average support for the demand side.
Future forecast
The domestic PP market prices fell in early September. Fundamentally speaking, the upstream raw material market is weak, and the overall support for PP is not good. The industry load remains stable at a high level, and there is a short-term expectation of loose supply in the future. In terms of consumption, it is at the junction of peak and off peak seasons. The current seasonal speculative atmosphere in the market is constrained by industry capacity expansion and weak demand, and it is expected that PP may still need to consolidate the market in the short term.
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