According to the data from Shengyishe Spot News, the domestic PP market recovered after a decline in the first half of May, and the price fluctuations of various brand products were relatively narrow. As of May 15th, the benchmark price for PP drawing offered by Shengyi Society was 9556.67 yuan/ton, an increase of 0.07% from the beginning of the month.
price trend
In terms of raw materials:
At the beginning of May, high-level officials from both the United States and Iran in the Middle East released positive signals, indicating that the long-term gap in crude oil supply will gradually narrow. However, in the short term, there are differences in the market’s judgment on the Middle East conflict. After the holiday, the international crude oil market experienced a severe sell-off, with WTI crude oil and Brent crude oil futures both falling sharply, hitting a two-week low. This week, the geopolitical premium of crude oil rebounded, and the market fluctuated in the first half of the month. The demand for propylene in the market is stable, but some companies have recently restarted their facilities. The expected increase in supply suppressed some of the gains and led to a pullback from the current high level. Overall, the PP raw material market is fluctuating, and recently it has provided sufficient support for PP costs.
Supply side:
During the first half of May, the production capacity of domestic PP enterprises stopped and returned, and the overall operating rate remained in the historical low range. As of the deadline for publication, the overall load of the domestic industry is around 50%, and the weekly output has fallen below 680000 tons. The current inventory position is around 730000 tons, and the overall supply performance is tight. Overall, the supply side has strong support for spot prices.
In terms of demand:
Affected by the rising market trend at the end of the first quarter, the current PP price is still at a mid to high level, and the downstream market in the industry remains resistant to high prices. The overall trading atmosphere is cautious. The current buyer camp is picking up goods on demand, with average warehouse building operations, and often seeing scattered small orders that can be picked up as needed. Meanwhile, due to the high cost pressure, the improvement in operating rates of small and micro end enterprises is limited, while large and medium-sized enterprises continue to stabilize and acquire goods. The demand side is generally in a wait-and-see situation, with average support for PP.
Future forecast
The domestic PP market prices fluctuated narrowly in the first half of May. Fundamentally speaking, maintenance in May maintained a concentrated trend, industry load levels bottomed out, port imports remained low, and spot resources in the market turned tight. However, with the expectation of weakened costs and weak demand, analysts from Business Society PP believe that the current PP market is weak in both supply and demand, and there is a lack of action in the future market, which may maintain the consolidation trend.