PP Market Trend on August 1st

Domestic Petrochemical Inventories: Polyolefin inventories from both crude and crude oils reached 800,000 tons, an increase of 50,000 tons from yesterday.

Futures Analysis: PP2509 Opening Price on August 1st: 7110, High: 7139, Low: 7084, Open Interest: 278,623, Settlement Price: 7113, Yesterday's Settlement: 7138, Down 25, Daily Trading Volume: 173,374 Contracts, Deposited Capital: 1.384 Billion, Outflow: 53.1 Million.

Mainstream Market Quotes for Wire Drawing:

Domestic Spot Market Analysis: The overall domestic PP market showed a weak consolidation trend today. Market prices in East China, South China, and Southwest China fell, with price reductions ranging from 10 to 30 yuan/ton. Market prices in North China and Northwest China remained stable.

Regarding prices: The mainstream domestic polypropylene price ranged from 6,960 to 7,200 yuan/ton. Most PP manufacturers maintained their ex-factory prices, while some lowered them by 10-50 yuan/ton based on their inventory and sales strategies. Only a few companies saw slight price increases due to factors such as cost support. 

From a downstream demand perspective, operating conditions across various polypropylene application sectors varied significantly. PP pipes, transparent PP products, and injection molding performed particularly well, with operating rates showing an upward trend. The transparent PP products sector, due to the continued implementation of domestic anti-involutionary policies, has seen more rational market competition and improved order quality. 

For example, orders for transparent food containers and takeout boxes have surged, driving a rebound in the sector's operating rate. The PP pipe sector, driven by a slight increase in recent construction project starts and improved market demand for pipes used in water supply, drainage, and heating, has boosted production enthusiasm. The PP injection molding sector has also seen improved operating conditions due to a rebound in orders for some home appliances and small plastic products. 

Other industries, such as PP woven bags (used in fertilizer and grain packaging) and PP meltblown fabrics (used in masks and filter materials), were impacted by the off-season, resulting in reduced demand and declining operating rates. This impacted spot market prices, with futures prices also showing a narrow decline, creating a subdued trading atmosphere. To expedite inventory turnover, traders generally adopted a strategy of offering discounts on shipments. 

However, overall purchasing sentiment among end-users was subdued, with most companies primarily replenishing inventory based on demand, and no large-scale stockpiling was observed. Overall, the market lacked strong momentum on both the supply and demand sides, resulting in an overall atmosphere of stability with pressure and subdued trading. A rebound in localized demand was unlikely to boost overall market activity.

Domestic Futures Market Analysis: The PP2509 contract price initially fluctuated upward in the evening session before retreating. After the morning opening, prices generally fluctuated within a narrow range. In the afternoon, prices showed a fluctuating downward trend. The PP2509 contract fluctuated between 7084 and 7139 throughout the day, with a spread of 55. Open interest in the PP2509 contract decreased by 9,874 lots, bringing the total open interest to 278,623 lots.

Market Forecast: Regarding macroeconomic policies, on July 31, the National Development and Reform Commission held a briefing on the situation in the first half of 2025, outlining several key tasks. Among them, it clearly stated the need to further advance the development of a unified national market, focusing on breaking down involutionary competition and fostering a healthier market ecosystem.

Furthermore, measures such as expanding investment, strengthening the full-process management of government investment projects, stimulating private investment, and implementing the "two-pronged" construction and "two new" policies with high quality will be adopted to stabilize investment and promote consumption, thereby stimulating market vitality and promoting stable economic development.

Furthermore, Changzhi is gradually implementing inspections of overproduction at coal mines. According to the latest news, four coal mines have been shut down, totaling 6.9 million tons of approved production capacity. This adjustment may have knock-on effects on related supply chains. In the crude oil market, continued US sanctions against oil-producing countries are supporting the market, but factors suppressing it remain. While geopolitical tensions have eased somewhat compared to previous periods, caution remains.

OPEC+ remains committed to increasing production, and the global economy is performing poorly. In the polypropylene market, the resumption date for some PP plants remains uncertain, creating uncertainties on the supply side. Regarding inventories, polyolefin inventories at the two major oil companies increased by 50,000 tons today compared to yesterday, having remained stable over the previous two days, showing an overall upward trend. Demand remains sluggish, with downstream purchasing activity remaining subdued. Domestic polypropylene prices in US dollars have fluctuated slightly in some areas, weakening overall domestic market prices. 

End-user purchasing interest is weak, leading to slight adjustments in trader quotes. Actual transactions are primarily negotiated, resulting in a subdued market atmosphere. Based on current market conditions, the polypropylene market is likely to continue its current trend in the short term, exhibiting a "stable with concerns, volatile and weak" trend.

Domestic PP Index: According to Tuduoduo data, the domestic PP spot index was 7071.00 on August 1, down 7 points, or 0.10%.

GuoNeng Auction Statistics: GuoNeng Coal Chemical's auction volume today was 1,782 tons, a 143.44% increase from yesterday; its transaction volume was 1,255 tons, a 438.63% increase from yesterday; and its transaction rate was 70.43%, a 38.6% increase from yesterday.

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