PP Market Steady Weak Nov
Domestic petrochemical inventory: The combined inventory of Sinopec and PetroChina's polyolefins reached 710,000 tons, a decrease of 10,000 tons from yesterday.
Futures Analysis: On November 18th, the PP2601 contract night session showed a slightly downward trend with fluctuations. Prices continued their weakness in the morning session, but rebounded in the afternoon after hitting a low, recovering slightly from the low and maintaining a consolidation phase. The 01 contract saw an increase of 5,539 lots in open interest.
Open price: 6473, highest price: 6488, lowest price: 6375, price difference: 113, open interest: 638,417, settlement price: 6427, previous settlement price: 6465, decrease: 38, daily trading volume: 313,979 lots, idle funds: 2.857 billion, capital outflow: 8.44 million.
Mainstream market prices for PP (rough grade):
Domestic spot market analysis: Today, the domestic PP market showed an overall trend of stability with a slight downward bias. Prices in East China saw a slight decline, fluctuating between 30-40 yuan/ton. Prices in North China, South China, Southwest China, and Northwest China remained stable compared to yesterday. Domestic polypropylene mainstream prices ranged from 6240-6580 yuan/ton.
The current PP market is exhibiting a weak consolidation pattern driven by supply and demand dynamics. On the production side, most PP companies maintained stable ex-factory prices, while structural price adjustments occurred, with some grades lowering prices by 10-100 yuan/ton, and certain grades simultaneously raising prices.
This reflects companies' flexible strategies based on their own inventory and grade supply and demand. Demand was relatively weak, with downstream industry demand generally sluggish and insufficient follow-up orders, directly leading to a lackluster trading atmosphere and difficulty in generating effective transaction support.
At the trader level, influenced by the weak market, traders were cautious about offering discounts, focusing mainly on selling on an as-needed basis, further restricting market activity. The current weak demand is insufficient to offset the pressure from the supply side.
The market lacks significant positive factors in the short term, and poor transmission between different segments has resulted in a consistently subdued trading atmosphere. Under the dual influence of supply-demand imbalance and a lack of positive support, the overall market price exhibits a clear downward trend. The interplay between supply and demand, coupled with the absence of positive market support, constitutes the core characteristics of the current market operation.
Market Outlook: The PP market is currently in a complex situation of intertwined bullish and bearish factors. The positive factors supporting the market mainly stem from two aspects: firstly, the continued US sanctions against oil-producing countries; and secondly, the persistent uncertainty in the geopolitical situation. These two factors together provide some support to the market. However, in terms of actual impact, the bearish factors are more dominant.
OPEC+ maintains its stance of increasing production, coupled with a slowdown in the global economic recovery and weak end-user demand. Downstream factories are struggling to keep up with new orders, with most companies only maintaining a purchase pace sufficient for immediate needs. This situation directly puts pressure on the overall market trading atmosphere.
Dragged down by negative fundamentals, futures prices fluctuated downwards, further exacerbating market participants' wait-and-see sentiment and suppressing trading activity. While there have been short-term adjustments on the supply side, with PP plants at companies such as Dushanzi Petrochemical, Yuntianhua, and Shanghai Petrochemical expected to initiate shutdowns today, reducing market supply in the short term, current market inventory remains high, and inventory reduction is slow, meaning supply-side pressure has not been substantially alleviated.
Furthermore, the anticipated stimulus effect of the Double Eleven shopping festival failed to meet expectations, failing to effectively stimulate downstream demand and further weakening market support.
In summary, in the short term, the support from positive factors is insufficient to offset the suppressive effect of negative factors. The core contradictions of supply-demand imbalance, high inventory, and weak demand have not been resolved, and the polypropylene market is expected to maintain a stable to weak operating trend.
Domestic PP Index: According to data from TuDuoDuo, the domestic PP spot index was 6409.00 on November 18th, down 7, a decrease of 0.11%.
Guoneng's auction statistics: Guoneng Coal Chemical's auction volume today was 2,100 tons, an increase of 10.53% compared to yesterday; 1,856 tons were sold, an increase of 64.39% compared to yesterday, with a transaction rate of 88.38%, an increase of 28.96% compared to yesterday.
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