Polypropylene: Inventory Decline + Supply Shrinkage

Domestic Petrochemical Inventories: Polyolefin inventories from both crude and crude oils reached 750,000 tons, down 30,000 tons from yesterday.

Futures Analysis: July 30th PP2509 Opening Price: 7153, High: 7197, Low: 7136, Open Interest: 299,702, Settlement Price: 7165, Yesterday's Settlement: 7147, Up 18, Daily Trading Volume: 208,517 Contracts, Deposited Capital: 1.499 Billion, Outflow: 48.52 Million.

Mainstream Market Quotes for Wire Drawing:

Domestic Spot Market Analysis: Today's domestic PP market showed a mixed trend. Market prices in East, South, and Northwest China all saw increases, while prices in Southwest China saw declines. Prices in North China remained stable, with overall market price fluctuations ranging from 10 to 20 yuan/ton. Regarding prices: The mainstream domestic polypropylene price ranged from 6,980 to 7,210 yuan/ton. Due to a relatively stable supply of upstream raw materials, manufacturers' costs have not fluctuated significantly.

Furthermore, companies have relatively conservative market expectations and are hesitant to adjust prices easily to avoid affecting their market share. Consequently, ex-factory prices at PP manufacturers have mostly remained stable. Some, facing significant inventory pressures, have necessitated price cuts ranging from 50 to 150 yuan per ton to boost shipments.

Overcapacity exists in some downstream sectors of PP, such as plastic weaving and injection molding. In the absence of significant growth in market demand, excessive capacity has led to a supply oversupply, insufficient plant utilization, and a period of low season. Furthermore, high summer temperatures are unfavorable for outdoor pipe construction.

High temperatures can affect the quality of hot-melt connections and reduce the pipe's physical properties. Furthermore, high temperatures reduce worker efficiency and increase construction costs, slowing construction progress and significantly reducing demand for PP pipe. Amidst weak downstream demand, traders are actively shipping to alleviate inventory pressures and recover capital.

They are reducing profit margins to attract downstream customers. However, due to insufficient overall market demand, downstream companies are reluctant to purchase, resulting in a subdued trading atmosphere.

Domestic Futures Market Analysis: PP2509 contract prices fluctuated within a narrow range in the evening session, but the price center of gravity gradually shifted upward. After the morning opening, prices dipped before entering a period of minor fluctuations.

In the afternoon, prices fluctuated downward, gradually falling below the morning trading range. The PP2509 contract fluctuated between 7136 and 7197 throughout the day, with a spread of 61. Open interest in the PP2509 contract decreased by 9,052 lots, leaving the current open interest at 299,702 lots.

Market Forecast: Macroeconomically, Trump stated that he would impose tariffs on Russia if a ceasefire agreement with Ukraine is not reached within 10 days. While he stated that he would not be concerned about oil prices if sanctions were imposed, the implementation of sanctions would inevitably impact the global energy and chemical raw material markets.

As a downstream product of oil, the cost and supply of polypropylene could change. Furthermore, India is expected to reach a trade agreement with the United States in September or October, preparing for potential 20% to 25% tariffs. The uncertainty in the trade environment could also indirectly impact the global polypropylene market's trading structure and price trends.

According to Mysteel, large state-owned mines in the Yulin region operated normally on the 29th, while some private coal mines halted operations, leaving inventories low. Recent frequent, short-term heavy rainfall has impacted coal production, leading to a slight tightening of supply. As a key energy source and chemical raw material, changes in coal supply will indirectly impact the cost and supply of polypropylene production. Regarding crude oil, the positive market trend is driven by the continued implementation of US sanctions against oil-producing countries.

However, factors that dampened the market include the easing of geopolitical tensions, though still unstable, the continued production increases by OPEC+, and the weak global economic conditions. Regarding supply, polyolefin inventories at both oil and gas companies decreased by 30,000 tons today compared to yesterday, a decrease that will have a certain impact on the market supply structure. Dongming Petrochemical's PP unit is expected to be shut down today, further reducing polypropylene supply.

Currently, the domestic polypropylene price in US dollars is generally stable, with only minor fluctuations. Domestic prices are consolidating within a certain range, and trader quotes remain generally stable. However, the downstream market remains in the off-season, and weak demand is hindering further market development. Overall, polypropylene market prices are expected to remain range-bound in the short term.

Domestic PP Index: According to Tuduoduo data, the domestic PP spot index was 7099.00 on July 30th, up 7%, or 0.10%.

GuoNeng Auction Statistics: GuoNeng Coal Chemical's auction volume today was 1090 tons, a decrease of 21.24% from yesterday; its transaction volume was 624 tons, a decrease of 46.48% from yesterday; and its transaction rate was 57.25%, a decrease of 27% from yesterday.

Our platform connects hundreds of verified Chinese chemical suppliers with buyers worldwide, promoting transparent transactions, better business opportunities, and high-value partnerships. Whether you are looking for bulk commodities, specialty chemicals, or customized procurement services, TDD-Global is trustworthy to be your fist choice.