PP Supply Demand Weak Shock
Domestic petrochemical inventory: The combined inventory of Sinopec and PetroChina's polyolefins reached 760,000 tons, an increase of 85,000 tons from last week.
Futures Analysis: On November 3rd, the PP2601 contract price rose initially in the night session before fluctuating downwards. In the morning session, prices briefly dipped before rebounding quickly, exhibiting a range-bound trading pattern. In the afternoon session, the price gradually shifted downwards. The 01 contract saw an increase of 22 lots in open interest. Open price: 6600; highest price: 6629; lowest price: 6573; price difference: 56; open interest: 624,712; settlement price: 6603; previous settlement price: 6631; decrease: 28; daily trading volume: 297,804 lots; idle funds: 2.876 billion; capital outflow: 6.02 million.
Mainstream market prices for PP (rough-grain) 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 declined compared to last Friday, with price reductions ranging from 20-70 yuan/ton. Domestic mainstream polypropylene prices range from 6360-6640 yuan/ton.
Currently, PP producers' ex-factory prices are generally showing a pattern of "large stability with minor fluctuations," with stability as the core theme. Most companies have chosen to maintain their existing ex-factory prices, while only a few have adjusted prices based on their own circumstances, with adjustments ranging from 10-350 yuan/ton. A few individual companies have also slightly increased prices by 30-50 yuan/ton for specific grades, exhibiting localized and differentiated price adjustments.
From the distribution side, influenced by the overall market conditions, traders have adopted a strategy of offering discounts to promote transactions, further pushing the spot market trend towards weakness. This is reflected in market prices, which are generally declining. On the demand side, the purchase pattern remains one of immediate need, with downstream companies showing weak purchasing sentiment and no active restocking or expansion of purchases. This has led to a continued poor market trading atmosphere, and the weakness on both the supply and demand sides has further solidified the current bearish trend in the PP market.
Market Outlook: The current PP market is facing a complex mix of bullish and bearish factors. The positive factors mainly rely on the continuation of US sanctions against oil-producing countries and the market support brought by geopolitical uncertainties. The negative pressure stems from OPEC+'s continued stance of increasing production, coupled with the dual drag of weak global economic recovery and overall poor end-user demand. Looking at the specific performance on both the supply and demand sides, the supply side exhibits a characteristic of "partial adjustments, overall pressure."
Although some PP plants entered a shutdown phase today, the simultaneous restart of the Quanzhou Guoheng PP plant provided incremental replenishment, and the inventories of the two major oil companies increased by 85,000 tons over the weekend. After offsetting supply and demand, the supply-side pressure remains significant. On the demand side, effective support has not materialized. Despite high market expectations at the beginning of the month, downstream enterprises have not followed up with sufficient orders, and restocking sentiment is generally cautious, maintaining only a basic demand purchasing pace, which is insufficient to provide substantial support to the market. In summary, the polypropylene market is expected to continue its weak and volatile pattern in the short term.
Domestic PP Index: According to data from TuDuoDuo, the domestic PP spot index was 6506.00 on November 3rd, down 28 points, a decrease of 0.43%.
Guoneng Auction Statistics: Guoneng Coal Chemical's auction volume today was 2292.728 tons, a decrease of 99.83% compared to yesterday; the transaction volume was 1760.925 tons, an increase of 64.27% compared to yesterday, with a transaction rate of 76.80%, an increase of 76.73% compared to yesterday.
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