PP Short-Term Weak Volatility
Domestic petrochemical inventory: Sinopec and PetroChina's polyolefin inventory reached 720,000 tons, an increase of 55,000 tons from last week.
Futures Analysis: On November 10th, the PP2601 contract night session price generally showed a pattern of rising and then falling. The price continued its downward trend in the morning session, and although there was a slight rebound later, the magnitude was limited.
In the afternoon session, the price began to fluctuate upwards, maintaining a high level of fluctuation at the close. The 01 contract saw a decrease of 13,051 lots in open interest. Opening price: 6457, highest price: 6488, lowest price: 6442, price difference: 46, open interest: 642,285, settlement price: 6463, previous settlement price: 6464, decrease: 1, daily trading volume: 276,564 lots, idle funds: 2.913 billion, capital outflow: 51.86 million.
Mainstream market prices for PP (rough grade):
Domestic spot market analysis: Today, the domestic PP market generally continued its stable trend. Prices in North China, East China, South China, Southwest China, and Northwest China remained stable, with mainstream domestic polypropylene prices ranging from 6240 to 6560 yuan/ton.
The current PP market is characterized by "narrow price fluctuations, subdued trading activity, and a cautiously stable sentiment." Driven by the interplay between supply and demand, ex-factory prices from producers are diverging. Most companies are maintaining stable quotes, while some are lowering prices by 20-100 yuan/ton based on their inventory pressure and order situation.
Only a few companies are slightly raising prices by 20-50 yuan/ton, with overall price adjustments remaining within a controllable range and no significant fluctuations. Insufficient support from end-user demand has led to a cautious wait-and-see attitude among buyers, resulting in poor market activity and a weak trading atmosphere. Against this backdrop, traders are generally adopting a market-driven sales strategy to accelerate inventory turnover and alleviate financial pressure, offering moderate discounts to promote transactions.
From a market expectation perspective, although current demand has not yet provided effective support, the industry generally believes that the downside potential for prices is relatively limited. Furthermore, the overall fluctuation in spot market offers has not been significant, further reinforcing the cautious and prudent mindset of market participants, and the market has not shown excessive bearish sentiment.
Market Outlook: The current market is mired in a complex interplay of bullish and bearish factors. On the positive side, the US sanctions against oil-producing countries continue to be implemented without any signs of easing, coupled with lingering uncertainties in geopolitical situations in some regions of the world, providing temporary support to the market.
Meanwhile, international trade disputes are showing signs of easing, reducing the disruption to the industrial chain and indirectly strengthening cost support slightly. However, the suppressive effect of bearish factors is more prominent and dominant: OPEC+ has consistently maintained its stance of increasing production and has not adjusted its supply strategy in response to changes in market demand.
Coupled with the concentrated release of new domestic production capacity, the loose supply situation is further highlighted. Meanwhile, the global economic recovery is slowing, and end-user demand remains weak, resulting in generally sluggish market transactions.
Downstream enterprises, affected by the macroeconomic environment and their own operational pressures, are adopting a cautious and conservative purchasing mentality, focusing on immediate needs and showing insufficient willingness to actively replenish inventory, lacking a core driving force for sustained improvement in demand.
Furthermore, the inventory of Sinopec and PetroChina increased by 55,000 tons over the weekend, further exacerbating the supply-side competition and exerting additional downward pressure on market sentiment.
In summary, while bullish and bearish factors are currently balancing each other in the market, the core contradiction of loose supply and weak demand has not yet been alleviated. Positive factors can only provide a short-term buffer and are unlikely to form an effective hedge. The polypropylene market is expected to continue its narrow-range, weak trend in the short term.
Domestic PP Index: According to data from TuDuoDuo, the domestic PP spot index was 6406.00 on November 10th, down 0.00%.
Guoneng Auction Statistics: Guoneng Coal Chemical's auction volume today was 1740.875 tons, a decrease of 21.86% compared to yesterday; the transaction volume was 1259.875 tons, an increase of 31.24% compared to yesterday, with a transaction rate of 72.37%, an increase of 29.28% compared to yesterday.
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