PP Market Weak Trend Nov 5
Domestic petrochemical inventory: The combined inventory of Sinopec and PetroChina's polyolefins reached 710,000 tons, a decrease of 25,000 tons from yesterday.
Futures Analysis: On November 5th, the PP2601 contract price weakened in the night session. Although there was a slight rebound in the morning, the momentum was insufficient, and it subsequently fell back. In the afternoon, the price fluctuated and consolidated in a low range. The 01 contract saw an increase of 16,153 lots in open interest. Opening price: 6550, highest price: 6552, lowest price: 6477, price difference: 75, open interest: 644,601, settlement price: 6508, previous settlement price: 6565, decrease: 57, daily trading volume: 345,070 lots, idle funds: 2.929 billion, capital inflow: 43.04 million.
Mainstream market prices for PP (rough grade):
Domestic spot market analysis: Today, the domestic PP market showed an overall weak trend. Prices in North China, East China, South China, Southwest China, and Northwest China all declined compared to yesterday, with price reductions ranging from 20 to 80 yuan/ton. Domestic polypropylene mainstream prices range from 6330 to 6610 yuan/ton.
The current PP market is generally showing a weak consolidation pattern. Upstream producers are mainly maintaining stable ex-factory prices with minor adjustments in some areas. Most companies are maintaining stable prices to avoid market volatility risks, while some have slightly lowered prices by 10-100 yuan/ton to promote sales. Only a few special grades are cautiously raising prices due to tight resources, resulting in a "largely stable, small-scale fluctuation" characteristic in prices.
Midstream traders, affected by weak downstream demand, lack confidence in the future market and generally adopt a cautious strategy of offering discounts to accelerate inventory turnover, further reflecting the pressure on the market.
Downstream demand lacks effective support, and purchasing enthusiasm is limited, leading to overall lackluster transaction performance and difficulty in positively impacting the market. Meanwhile, the volatile decline in futures prices further exacerbated the cautious sentiment in the market. Weak spot trading and a bearish futures atmosphere interacted to constrain market recovery, making it difficult to change the current weak PP market trend in the short term.
Market Outlook: The current PP market is in a state of flux, with both bullish and bearish factors at play, but bearish forces generally dominate. On the positive side, the continuation of US sanctions against oil-producing countries such as Iran and Russia has limited crude oil exports from these countries, leading to expectations of a contraction in global crude oil supply.
Coupled with geopolitical uncertainties, this provides support for the crude oil market, potentially benefiting PP costs. However, the suppressive effect of bearish factors is more significant. OPEC+ maintains its stance of increasing production, and the pressure of oversupply in 2025 has already emerged, significantly weakening cost support.
At the same time, weak global economic conditions and demand mean downstream industries are only continuing to purchase based on immediate needs, with very limited impact on market recovery. Although the Double Eleven e-commerce promotions have slightly improved demand in areas such as packaging film, the core contradiction of supply-demand imbalance has not been fundamentally resolved.
Against this backdrop, Donghua Energy and Beihai Refinery's combined 600,000-ton PP units are expected to restart today, further increasing market supply and exacerbating supply and demand pressures. Overall, the polypropylene market is expected to maintain a weak and volatile pattern in the short term.
Domestic PP Index: According to data from TuDuoDuo, the domestic PP spot index was 6468.00 on November 5th, down 32, a decrease of 0.49%.
Guoneng Auction Statistics: Guoneng Coal Chemical's auction volume today was 1100 tons, a decrease of 30.95% compared to yesterday; 402 tons were sold, a decrease of 72.32% compared to yesterday, with a transaction rate of 36.55%, a decrease of 54.60% compared to yesterday.
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