August 27th China PP Market Review
Domestic petrochemical inventories: Polyolefin inventories of both crude and crude oil products reached 705,000 tons, down 25,000 tons from yesterday.
Futures Analysis: The PP2601 contract price rose slightly in the evening session on August 27th. Prices fluctuated narrowly in the morning session, and then fluctuated downward in the afternoon session. Opening price for the PP2601 contract increased by 7,338 lots. Opening price: 7,041, High: 7,056, Low: 7,014, with a spread of 42. Open interest: 481,684. Settlement price: 7,036. Yesterday's settlement price: 7,072, a decrease of 36. Daily trading volume: 185,187 lots. Deposited funds: 2.367 billion yuan. Inflow: 27.76 million yuan.
Mainstream wire drawing market quotes:
Domestic spot market analysis: Today, the domestic PP market showed an overall weak trend. Market prices rose only in the southwest region, while they remained stable in the northwest. Prices in North China, East China, and South China declined slightly, fluctuating between 10 and 50 yuan per ton.
Regarding prices, the mainstream domestic polypropylene price ranged from 6,880 to 7,090 yuan per ton. Currently, ex-factory prices at PP manufacturers are generally stable with minor fluctuations, with only a few companies slightly lowering their quotations.
The mainstream price level remains largely stable. From a market-to-downstream perspective, while downstream demand is showing signs of marginal improvement, driven by anticipation of the approaching "Golden September" peak season, actual order releases are limited, and the overall market boost has yet to materialize.
Against this backdrop, traders are generally continuing to offer discounts to boost firm trades. Market participants are generally cautious about future market trends, adopting a wait-and-see approach, resulting in a generally subdued trading atmosphere.
Market Forecast: The market is experiencing a complex dynamic of bullish and bearish factors. Positive factors are primarily supported by the continued effectiveness of US sanctions on oil-producing countries and the risk-averse sentiment in the energy market stemming from the uncertainty surrounding the Russia-Ukraine situation. Negative factors include OPEC+'s insistence on increasing production and the lack of momentum in the global economic recovery, limiting the market's upward potential.
Currently, domestic polypropylene plants are operating generally smoothly, with the restart date for previously suspended plants still unclear. Supply remains relatively stable for the time being. The domestic market is generally in a weak consolidation range, with subdued trading and a strong wait-and-see attitude on both the supply and demand sides.
Traders are generally adopting a price stabilization strategy, with most maintaining their current offers, while a few are slightly lowering their bids to stimulate transactions and ease inventory pressures. With the traditional peak demand season of September approaching, the polypropylene market will enter a critical phase in the short term, characterized by a "supply-demand game" and peak season expectations. On the demand side, marginal improvements are expected.
Downstream industries such as plastic weaving and injection molding are expected to see a slight increase in operating rates as temperatures cool and holiday stocking begins, providing some support to the market. Overall, the polypropylene market is expected to exhibit a "weakly stable, volatile, and gradually tentative" trend in the short term.
Domestic PP Index: According to Tuduoduo data, the domestic PP spot index was 6987.00 on August 27, down 10 points, or 0.14%.
Guoneng Coal Chemical's auction volume today was 2,411 tons, a 64.13% increase from yesterday; 325 tons were sold, a 72.89% decrease from yesterday, with a transaction rate of 13.48%, a 68.14% decrease from yesterday.
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