PP Market Analysis (January 7)
Domestic petrochemical inventory: The combined inventory of Sinopec and PetroChina's polyolefins reached 610,000 tons, a decrease of 50,000 tons from yesterday.
Futures Analysis: On January 7th, the PP2605 contract price fluctuated higher in the night session. The price quickly dipped in the morning, hitting a daily low before recovering somewhat. In the afternoon session, the price fluctuated upwards, reaching a daily peak before slightly retreating and maintaining a high level of fluctuation. The 05 contract saw a decrease of 1191 lots in open interest.
Opening price: 6426, highest price: 6510, lowest price: 6425, price difference: 85, open interest: 520378, settlement price: 6464, previous settlement price: 6384, increase: 80, daily trading volume: 485035 lots, idle funds: 2.363 billion, capital inflow: 17.59 million.
Mainstream market prices for PP (Powder Roughness):
Domestic Spot Market Analysis: Today, the domestic PP market showed a strong upward trend overall. Prices in North China, East China, South China, Southwest China, and Northwest China all saw varying degrees of increase compared to yesterday, with increases ranging from 20-70 yuan/ton. Domestic polypropylene mainstream prices ranged from 6020-6480 yuan/ton. Today, the PP market showed a stable to slightly upward trend. Producers generally kept their ex-factory prices stable, with only a few companies raising their prices by 10-100 yuan/ton based on factors such as low inventory and cost support.
The core driver of price fluctuations was the continuous rise in futures prices. Boosted by this, spot market prices followed suit with a slight increase, and the trading atmosphere improved marginally compared to the previous period. However, current downstream demand remains at a moderate level, with end-user factories mainly purchasing for immediate needs and no large-scale restocking. This has led to a generally cautious market sentiment.
Against this backdrop, traders actively adopted a strategy of offering higher prices to sell, attempting to leverage the positive futures market sentiment to drive transactions. Actual transaction prices were mostly determined through negotiation, resulting in an overall market characteristic of "futures driving spot prices, demand limiting price increases."
Market Outlook: The current PP market is experiencing intense competition between bulls and bears, with favorable costs and unfavorable demand creating a stark contrast. OPEC+'s suspension of production increases, the continuation of US sanctions against oil-producing countries, and geopolitical uncertainties provide strong support for the upstream raw material market. However, the slow global economic recovery, overall weak end-user demand, and the delayed pace of the Federal Reserve's interest rate cuts are significantly suppressing market upward movement.
While the volatile rise in futures prices briefly boosted market sentiment and spot inventories decreased by 50,000 tons compared to yesterday, the characteristics of the winter off-season remain significant, and the impact of the peak winter flu season on demand in some downstream sectors is gradually becoming apparent. Among downstream sectors, the packaging industry, the largest consumer of PP, is only maintaining a basic restocking pace.
Demand for modified PP for automobiles fluctuates with the production and sales of new energy vehicles, with no significant increase in orders yet. Although the medical sector has seen a slight increase in demand for some medical PP products such as disposable infusion sets and mask packaging due to the high incidence of colds, the overall increase is limited and insufficient to offset the overall market weakness.
The textile and agricultural film sectors are also experiencing weak purchasing intentions due to seasonal factors and end-user order constraints. The market remains cautious about the effects of the new policies, with downstream enterprises generally holding a wait-and-see attitude, and supply-side pressures have not yet been substantially alleviated. Overall, the polypropylene market lacks a core driver for sustained upward movement in the short term and is expected to mainly fluctuate within a range.
Domestic PP Index: According to data from TuDuoDuo, the domestic PP spot index was 6238.00 on January 7th, up 46 points, or 0.74%.
Guoneng Auction Statistics: Guoneng Coal Chemical's auction volume today was 1410 tons, a decrease of 15.85% compared to yesterday; 1374 tons were traded, a decrease of 16.58% compared to yesterday, with a transaction rate of 97.45%, a decrease of 0.85% compared to yesterday.
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