Oct 15 China PP Market Update
Domestic petrochemical inventories: Polyolefin inventories of oil and petroleum products reached 820,000 tons, down 5,000 tons from yesterday.
Futures Analysis: The PP2601 contract price fluctuated and consolidated in the night session on October 15th. The price began a fluctuating upward trend in the morning session, then slowly declined near the end of the morning session. The price rebounded again in the afternoon session, reaching a high similar to the morning session before maintaining a fluctuating and consolidating trend.
The 01 contract saw an increase of 2,325 lots. The opening price was 6,575, the high was 6,621, the low was 6,561, with a spread of 60. Open interest was 667,779, and the settlement price was 6,590. Yesterday's settlement price was 6,628, a decrease of 38. Daily trading volume was 270,926 lots, with deposited funds of 3.083 billion yuan and inflows of 7.47 million yuan.
Mainstream market quotes for wire drawing:
Domestic spot market analysis: The domestic PP market continued its weak trend today. Market prices in North China, East China, South China, Southwest China, and Northwest China all declined to varying degrees compared to yesterday, with price reductions ranging from 10 to 50 yuan/ton. Regarding prices, the mainstream domestic polypropylene price ranges from 6,470 to 6,670 yuan/ton.
The current PP market is showing clear signs of weakness. Specifically, while upstream manufacturers' ex-factory prices have mostly remained stable, some have reduced them by 30 to 200 yuan/ton. This price easing has exerted pressure on the market, pushing the overall center of gravity downward. As a result, midstream traders are continuing to offer discounts to attract orders in order to accelerate inventory turnover and promote shipments.
Downstream companies, however, are focusing on replenishing inventory based on demand and have not increased purchases in response to price adjustments. This has limited support for the market, resulting in generally subdued market sentiment and low trading activity, further exacerbating the downward trend in market prices.
Market Forecast: The current PP market is characterized by a mix of bullish and bearish factors, but the overall pressure remains. On the one hand, positive support is relatively limited, coming solely from the continued US sanctions on oil-producing countries and the potential boost from geopolitical uncertainty. On the other hand, negative factors are more prominent. OPEC+'s insistence on increasing production continues to suppress crude oil costs, and the weak global economic performance further weakens overall market confidence. Supply and demand are also weak.
Although the PP units at Guangzhou Petrochemical's Line 1 and Shanghai Petrochemical's Line 3 are expected to shut down starting today, demand has failed to respond effectively. Downstream merchants remain cautious, purchasing on a demand-driven basis. Pre-holiday inventory depletion is slow, exacerbating the market supply-demand imbalance, with supply significantly exceeding demand.
There are also no new positive factors to improve market sentiment. Overall, the polypropylene market is expected to lack upward momentum in the short term and may continue to fluctuate weakly.
Domestic PP Index: According to Tuduoduo data, the domestic PP spot index was 6584.00 on October 15, down 27 points, or 0.41%.
Guoneng auction statistics: Guoneng Coal Chemical's auction volume today was 2993.35 tons, up 164.43% from yesterday; the transaction volume was 2520.35 tons, up 458.84% from yesterday; the transaction rate was 84.20%, up 44.36% from yesterday.
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