Domestic PP Market Aug 6th

Domestic Petrochemical Inventories: Polyolefin inventories of both crude and crude oil products reached 785,000 tons, down 20,000 tons from yesterday.

Futures Analysis: The PP2509 contract price initially dipped in the evening session on August 6th, hitting a relative intraday low before rebounding and subsequently fluctuating. After the morning opening, the price fluctuated upward before rising and then retreating. In the afternoon, the price entered a period of consolidation. Positions for the PP2509 contract decreased by 7,127 lots.

The opening price was 7,090, the high was 7,100, the low was 7,071, with a spread of 29. Opening volume was 251,424 lots. The settlement price was 7,084. Yesterday's settlement price was 7,066, an increase of 18. Daily trading volume was 135,233 lots. Deposited funds were 1.246 billion yuan. Outflows were 38.39 million yuan.

Mainstream Market Quotes for Wire Drawing:

Domestic Spot Market Analysis: Today, the overall domestic PP market showed a differentiated trend of "most rising, some adjusting." Market prices in the southwest and northwest regions have declined, with decreases ranging from 10 to 20 yuan/ton. Market prices in North China, East China, and South China have seen slight increases, with increases ranging from 10 to 30 yuan/ton.

Regarding prices: The mainstream domestic polypropylene price ranges from 6,940 to 7,200 yuan/ton. Ex-factory prices at PP manufacturers remain generally stable, with only a few companies experiencing slight price reductions of 20 to 100 yuan/ton. Futures trading is flat, lacking significant volatility.

Spot prices are fluctuating and consolidating, with a lack of clear short-term guidance, leading to a subdued market trading atmosphere. Downstream market purchases are primarily driven by rigid demand, with plastic weaving companies primarily replenishing inventory on demand. 

Raw material procurement for woven bags and other packaging products remains at a rigid pace, with no significant stockpiling activity. BOPP film companies, impacted by sluggish end-use packaging demand, have maintained low raw material procurement, primarily focusing on on-demand purchases, further exacerbating the sluggish market trading.

Market Forecast: Regarding crude oil, the continued US sanctions on oil-producing countries provide some support to the polypropylene market, but factors such as OPEC+'s production increase, easing geopolitical tensions, and a weakening global economy are exerting downward pressure.

Regarding futures, polypropylene futures showed strong volatility during the day. On the supply side, the current recovery schedule of on-site PP plants has remained unchanged, while polyolefin inventories of the two oil majors have been declining for two consecutive days following weekend accumulations.

Currently, domestic polypropylene prices in US dollars continue to consolidate, and domestic spot prices are also range-bound. At the terminal level, purchasing enthusiasm is weak, with insufficient willingness to take orders. Traders' quotes remain generally stable, leaving room for negotiation in actual transactions.

In the short term, driven by a combination of bullish and bearish factors, the polypropylene market is likely to continue its range-bound fluctuations. However, as the main contract rollover period approaches, a process typically accompanied by adjustments in capital flows and market expectations, uncertainty in the futures market is expected to increase.

Domestic PP Index: According to Tuduoduo data, the domestic PP spot index was 7056.00 on August 6, up 3, or 0.04%.

GuoNeng Auction Statistics: GuoNeng Coal Chemical's auction volume today was 1,980 tons, a decrease of 1.98% from yesterday; 1,384 tons were sold, an increase of 2.06% from yesterday, with a sell-through rate of 69.9%, a 2.77% increase from yesterday.

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