According to the Commodity Market Analysis System of Shengyi Society, the PP market was mainly sorted out before the Spring Festival, with some brand products experiencing narrow price reductions. As of January 22nd, the mainstream offer price for wire drawing by domestic producers and traders is around 7558.33 yuan/ton, a decrease of -1.16% compared to the price level at the beginning of January.

Price trend

In terms of raw materials:

Recently, international crude oil prices have fluctuated and risen. Due to the extension of the OPEC+production reduction agreement until the end of the first quarter and the obstruction of some shipments, concerns about crude oil supply have risen. In addition, the recent low temperature weather in Europe and America has boosted demand, and various factors have stimulated the rise of the oil market. Overall, the upstream support of PP is strengthening. However, the purchasing power of propylene has been poor recently, and it has risen to a high level in the early stage due to the boost of external markets and raw materials, resulting in a significant decline in propylene in late January. It will take some time for propane to receive favorable transmission from raw materials, and it is still in a weak consolidation market at present. Overall, the PP raw material market fluctuated before the Spring Festival in January, and the cost value maintained positive guidance.

Supply side:

Domestic PP enterprises have resumed work and production, resulting in an increase in pre holiday load levels. In the early stage, the load of enterprises such as Sino Korean Petrochemical and Qilu Petrochemical gradually returned, and overall, the industry’s overall load increased by about 4% to 83%. The domestic weekly average production is over 730000 tons, and the PP shipment volume is flat. At the same time, newly put into operation devices are being produced one after another, and the market supply is abundant. Overall, the supply side provides moderate support for PP spot prices.

In terms of demand:

Before the holiday, the demand for PP tends to be weak and rigid. As the Spring Festival holiday approaches, the consumption level of woven bags such as fertilizers, cement, and rice has decreased, and the consumption level of plastic weaving has also declined. Terminal enterprises have basically completed pre holiday stocking, with a low willingness to continue purchasing and a tendency towards short-term buy as you go. Enterprises are gradually entering the holiday season, resulting in a decrease in workload. In addition, with the trend of year-end fund withdrawal in the market, overall, the demand side has shown weak performance.

Future forecast

The domestic PP market price consolidation was weak before the Spring Festival in January. Fundamentally speaking, the overall performance of upstream raw materials in supporting PP is still acceptable. The industry supply has increased. According to consumer feedback, as the Spring Festival approaches, businesses are gradually withdrawing from the market, and pre holiday stocking is gradually being completed. However, there is a lack of purchasing power in the market. In the short term, it is expected that PP prices will return to a calm pre holiday market with a relatively stable trend.