According to the commodity market analysis system of Shengyishe, the PP market slightly rebounded in mid December, with prices of various wire drawing brands increasing in a narrow range. As of December 18th, the mainstream quoted price for T30S (wire drawing) by domestic producers and traders is around 7600 yuan/ton, with a fluctuation of -0.65% compared to the initial average price level.

Cause analysis

Industry chain: In terms of PP raw materials, there has been solid news of OPEC’s recent reduction in international crude oil production, with prices rebounding and overall performance rising from a low level. Propylene has been boosted by crude oil, but the price has come under pressure and returned to consolidation. Due to the loosening of propane prices, cost support for PDH has fallen. The methanol market is relatively stable. Upstream raw materials fluctuate, and overall support for PP is still acceptable.

The flow of raw materials varies in various directions, and the cost side provides significant support for PP. In terms of industry load, the average load of the polypropylene industry was around 73% in mid December, which was slightly lower than the previous period. Although the overall supply of goods is abundant, production and inventory have steadily declined, and the pressure on on-site supply has eased. In terms of demand, downstream plastic weaving production is maintained at around 42%, while the production rate of film materials and injection molding enterprises is maintained at over 60%, and the overall position remains stable. Terminal enterprises maintain cautious operations in purchasing goods, with poor trading activity on the exchange and overall consolidation of the wire drawing material market.

In terms of fiber materials, according to the commodity market analysis system of Shengyishe, as of December 18th, the spot price of domestic fiber PP has also declined. The mainstream quoted price for domestic producers and traders of Z30S (fiber) is around 7600 yuan/ton, with an increase or decrease of -0.16% compared to the average price at the beginning of the month, and a decrease of 7.13% compared to the same period last year. Recently, the main downstream non-woven fabric enterprises of PP fiber materials have maintained a stable load, with an operating rate of over 39%. The digestion speed of end products is relatively strong due to frequent outbreaks of influenza, and the demand for fiber materials in the market is increasing narrowly, which does not provide significant support for the price of non-woven fabrics. It is expected that the market for fiber materials will continue in the short term, and it is recommended to closely monitor the domestic supply and demand situation.

In terms of melt blown materials, the melt blown PP market saw a narrow decline in mid December. As of December 18th, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of Shengyishe is about 8075 yuan/ton. Compared with the average price level at the beginning of the month, the increase and decrease is -1.97%, with a year-on-year decrease of 19.78%. At present, the demand for facial protection in China has not increased significantly, and the impact of seasonal climate on the consumption of medical melt blown fabric materials is not yet significant. There is also no significant boost in domestic and foreign demand. It is expected that the melt blown material market will maintain a narrow consolidation trend.

Future Market Forecast

PP analysts from Business Society believe that the polypropylene market rebounded narrowly in mid December. The trend of upstream raw materials fluctuates, and there is still support from the cost side for the market. Terminal enterprises maintain their initial level of production, and their procurement operations tend towards a small amount of rigid demand. The load of the PP device has been reduced to alleviate some supply pressure. At present, the supply and demand of PP are still at a weak level, and the market momentum is not high. It is expected that the PP market will maintain a consolidation operation in the short term.