Polypropylene Market Weak Stable Consolidation

Domestic petrochemical inventories: Polyolefin inventories of both crude and crude oil products reached 700,000 tons, down 10,000 tons from yesterday.

Futures Analysis: The PP2601 contract's night trading price on September 2nd initially exhibited a V-shaped trend. After reaching a relatively high for the day, the price shifted downward. The price fluctuated downward in the morning, with the fluctuation range increasing from small to large. It rebounded near the close, and then consolidated in the afternoon trading.

Opening price for the PP2601 contract increased by 14,143 lots. The opening price was 6,967, the high was 6,978, the low was 6,935, with a spread of 43. Open interest was 572,749, and the settlement price was 6,953. Yesterday's settlement price was 6,949, a gain of 4%. Daily trading volume was 206,293 lots, with deposited funds of 2.784 billion yuan and inflows of 60.13 million yuan.

Mainstream Market Quotes for Wire Drawing:

Domestic Spot Market Analysis: Today, the domestic PP market showed a mixed trend. Only in North China did market prices remain stable compared to yesterday. Prices in East and Southwest China saw increases of 10-20 yuan/ton.

Prices in South and Northwest China saw decreases of 20-50 yuan/ton. Domestic polypropylene prices are currently stabilizing, with only a few companies slightly lowering their offers based on their own circumstances. From the demand side, downstream companies are showing little appetite for purchasing, with limited follow-up efforts.

Inventory replenishment is strictly driven by rigid production needs, with no significant proactive inventory increases. This, coupled with a volatile downward trend in the futures market, further dampened market confidence, leading to continued weakness in the spot market and low overall trading activity.

Market Forecast: Domestic PP plants will continue to operate at their current pace, with a clear production capacity recovery target. On the cost side, the international crude oil market is experiencing significant bull-bear dynamics.

The continued US sanctions on oil-producing countries, coupled with uncertainty surrounding the Russia-Ukraine situation, are supporting the crude oil market and indirectly benefiting PP costs. However, the easing of tensions between Palestine and Israel, OPEC+'s continued production increases, and a weak global economic outlook are collectively dampening upward momentum in the PP market and weakening cost support. Affected by cost fluctuations and the pace of import supply, domestic polypropylene prices in US dollars have remained generally stable, with some minor adjustments.

In the domestic market, prices have been range-bound due to lower-than-expected performance during the traditional peak demand season of September and relatively ample market supply. Looking ahead, with the approach of the traditional peak demand season, market demand is expected to improve. Holidays and the start of the school year will drive increased demand for PP daily necessities and packaging. Home appliance promotions will further boost PP demand. 

Downstream operating rates, previously depressed by high temperatures, are also expected to improve. However, supply pressures persist, with new capacity set to be commissioned and maintenance of existing units easing, leading to an overall easing of supply. Taking all factors into consideration, the polypropylene market is expected to continue its weak, stable consolidation pattern in the short term.

Domestic PP Index: According to Tuduoduo data, the domestic PP spot index was 6930.00 on September 2, down 9%, or 0.13%.

GuoNeng Auction Statistics: GuoNeng Coal Chemical's auction volume today was 1,837 tons, down 25.6% from yesterday; 1,379 tons were sold, up 42.31% from yesterday, with a sell-through rate of 75.07%, up 35.82% from yesterday.

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