August 25: China PP Market Review
Domestic petrochemical inventories: Polyolefin inventories of both crude and crude oil products reached 750,000 tons, an increase of 20,000 tons from last week.
Futures Analysis: The PP2601 contract opened higher in the evening session on August 25th, then continued to fluctuate in a narrow range. Prices initially fluctuated downward in the morning before rising again, and then range-bounded at a high level in the afternoon session.
Opening price: 7033, High: 7080, Low: 7033, with a spread of 47. Opening volume: 468,785, Settlement price: 7067, Yesterday's settlement: 7044, an increase of 23. Daily trading volume: 209,222 lots, Deposited funds: 2.321 billion yuan, Inflow: 27.56 million yuan.
Mainstream market quotes for wire drawing:
Domestic spot market analysis: Today, the domestic PP market showed a mixed trend of gains and losses. Market prices remained stable only in Northwest China. Prices in North, East, South, and Southwest China all saw some adjustments, with fluctuations ranging from 10 to 50 yuan per ton. Regarding prices, the mainstream domestic polypropylene price ranged from 6,870 to 7,120 yuan per ton.
Ex-factory prices in the PP industry remained generally stable, with a few companies raising their quotations for some products by 10 to 100 yuan per ton. Meanwhile, prices for specific grades decreased. On the futures side, the main PP contract showed a narrow upward trend, with overall market fluctuations limited amidst the market's bull-bear game.
The downstream market is currently focused on purchasing for rigid demand, with companies showing little interest in replenishing non-essential inventory and adopting a cautious approach to stocking. In actual transactions, traders and manufacturers often offer modest discounts to boost orders, resulting in a subdued overall market trading atmosphere. Both buyers and sellers are maintaining a cautious wait-and-see approach, with no large-scale concentrated purchases or sell-offs occurring. Market supply and demand are currently relatively balanced.
Market Forecast: Regarding crude oil, the continuation of US sanctions on oil-producing countries and the uncertainty surrounding the Russia-Ukraine situation have provided some positive support to the market, stabilizing costs to a certain extent.
However, OPEC+'s continued production increase and the current weak global economy have created significant negative factors, weakening cost support and dampening market demand expectations. Currently, trading activity in the polypropylene market is limited.
The core reason is that downstream companies are focusing on purchasing for rigid demand, with little appetite for replenishing non-essential inventory and a high degree of caution in stocking. At the trader level, mainstream quotations remain generally stable to maintain market price stability.
However, in the actual transaction phase, faced with limited downstream purchasing demand, traders and manufacturers are often adopting a flexible strategy of offering moderate discounts, leaving room for negotiation to facilitate order fulfillment. Taking into account these factors, polypropylene market prices are likely to remain range-bound in the short term.
Domestic PP Index: According to Tuduoduo data, the domestic PP spot index was 6997.00 on August 25, down 0%, or 0.00%.
Guoneng auction statistics: Guoneng Coal Chemical's auction volume today was 1,933 tons, down 27.03% from yesterday; the transaction volume was 1,511 tons, down 27.39% from yesterday; the transaction rate was 78.17%, down 0.39% from yesterday.
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