PP Price Drop & Supply-Demand
Domestic petrochemical inventory: The combined inventory of Sinopec and PetroChina's polyolefins was 655,000 tons, a decrease of 30,000 tons from yesterday.
Futures Analysis: On November 26th, the PP2601 contract price fluctuated downwards in the night session. The price center of gravity moved upwards in the morning session, but in the afternoon session, the price fluctuated narrowly before experiencing a rapid plunge and continued to decline.
The 01 contract saw a decrease of 19,187 lots in open interest. Opening price: 6306, highest price: 6332, lowest price: 6258, price difference: 74, open interest: 586,572, settlement price: 6297, previous settlement price: 6355, decrease: 58, daily trading volume: 442,760 lots, idle funds: 2.572 billion, fund outflow: 106 million.
Mainstream market prices for PP (rough grade):
Domestic spot market analysis: Today, the domestic PP market showed an overall weak trend. Market prices in North China, East China, South China, Southwest China, and Northwest China all fell compared to yesterday, with price reductions ranging from 20-50 yuan/ton.
Domestic mainstream polypropylene prices ranged from 6150-6480 yuan/ton. Currently, the domestic PP market shows a divergent trend in supply-side price adjustments. Some producers maintained stable ex-factory prices to observe market changes, while others lowered ex-factory prices by 20-200 yuan/ton based on their inventory and order situation to alleviate sales pressure.
A few other companies slightly increased prices by 20-400 yuan/ton, possibly related to tight regional supply and cost support. Demand remains weak, with downstream industries operating at relatively low capacity. New orders are limited, and restocking is only focused on rigid production needs, with a low willingness to actively build up inventory, making it difficult to provide substantial support for market prices. Affected by the supply-demand imbalance, the market price trend is downward.
Traders are adopting a market-driven strategy to accelerate inventory turnover, offering discounts to attract transactions. However, due to insufficient downstream purchasing power, the overall market atmosphere is sluggish, with both buyers and sellers primarily operating on an as-needed basis. No large-scale transaction surges have occurred, and the market remains stable but weak.
Market Outlook: The current PP market is experiencing a complex interplay of bullish and bearish factors. The positive factors mainly stem from the continuation of US sanctions against oil-producing countries, coupled with uncertainties in the Middle East and the Russia-Ukraine conflict, providing temporary support to the crude oil market and indirectly benefiting PP costs. However, bearish factors are more prominent and dominant.
OPEC+ maintains its stance of increasing production to consolidate market share, while the global economic slowdown and weak end-user demand are further weakening cost support under this dual pressure. Downstream industries as a whole performed poorly.
Traditional sectors such as woven plastics and pipes were dragged down by the sluggish real estate market and weak exports, resulting in persistently low operating rates. While packaging materials saw a short-term boost in orders during e-commerce promotions, this momentum was insufficient, and post-holiday inventory accumulated rapidly.
Only sub-sectors like modified PP, driven by new energy vehicles and high-end home appliances, showed structural demand highlights, but their limited market share made it difficult to reverse the overall situation. Currently, downstream enterprises generally have low purchasing enthusiasm, continuing only for immediate needs, leading to slow inventory depletion.
Meanwhile, industry facilities are operating smoothly, and the continued release of new capacity further exacerbates the supply-demand imbalance. In summary, the supply-demand contradiction in the market is unlikely to be substantially alleviated in the short term.
With the traditional off-season approaching, the demand highlights in certain sub-sectors have limited impact on the overall market. It is expected that the polypropylene market will maintain a weak and volatile trend in the short term.
Domestic PP Index: According to data from TuDuoDuo, the domestic PP spot index was 6275.00 on November 26, down 20, a decrease of 0.32%.
Domestic PP Index: According to data from TuDuoDuo, the domestic PP spot index was 6275.00 on November 26, down 20, a decrease of 0.32%. Guoneng's auction statistics: Guoneng Coal Chemical's auction volume today was 900 tons, the same as yesterday; 559 tons were sold, a decrease of 23.21% from yesterday, with a transaction rate of 62.11%, a decrease of 18.78% from yesterday.
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