September 24th China PP Market Update

Domestic petrochemical inventories: Polyolefin inventories of both crude and crude oil products reached 630,000 tons, down 40,000 tons from yesterday.

Futures Analysis: The PP2601 contract price fluctuated upward in the evening session on September 24th, fluctuating narrowly in the morning before rising and falling in the afternoon session. Opening price: 6860, high: 6897, low: 6847, with a spread of 50. Opening volume: 636,505. Settlement price: 6870. Yesterday's settlement price: 6850, up 20. Daily trading volume: 178,124 lots. Deposited funds: 3.064 billion yuan. Outflow: 60.42 million yuan.

Mainstream market quotes for wire drawing:

Domestic spot market analysis: The domestic PP market showed an overall weak trend today. Market prices in North China, East China, South China, Southwest China, and Northwest China all adjusted to varying degrees, with price fluctuations ranging from 10 to 90 yuan/ton.

In terms of price: The mainstream domestic polypropylene price ranges from 6,670 to 6,970 yuan/ton. Currently, PP manufacturers are focusing on stabilizing their ex-factory pricing, with some companies making flexible adjustments based on inventory pressures and regional market conditions. Reductions have typically ranged from 10 to 250 yuan/ton, while some companies have increased their ex-factory prices by 10 to 100 yuan/ton due to cost constraints or limited resources.

Overall, the price structure has remained relatively stable. From a market perspective, there are currently no clear positive factors to boost market confidence. With the National Day holiday approaching, traders are prioritizing "active inventory reduction" to mitigate the risk of holiday inventory accumulation, resulting in a divergent market. For specifications with limited supply, traders are tentatively bidding high prices, while those facing significant inventory pressures and an urgent need to reduce inventory are primarily offering discounts.

Downstream demand is stable, with factories maintaining a cautious pace of replenishing inventory based on urgent needs. Large-scale centralized purchases have been avoided due to the pre-holiday period, resulting in subdued trading activity and a subdued trading atmosphere.

Market Forecast: Regarding crude oil, the continuation of US sanctions on oil-producing countries and geopolitical uncertainty provide potential support for costs. Meanwhile, OPEC+'s continued production increases continue to release supply pressure, and this, coupled with the slowdown in global economic growth, is dampening end-user demand, significantly suppressing the market.

On the supply side, a 500,000-ton annual PP plant in Baofeng, Ningxia, is scheduled to restart today, marginally increasing domestic PP supply. On the demand side, some downstream restocking efforts prior to the "Double Spring Festival" holiday have contributed to a marginal recovery in trading volume, but actual end-user demand has been insufficient, resulting in overall performance far below expectations.

Downstream operating rates are also at a year-on-year low. Upstream suppliers are actively destocking to mitigate holiday inventory build-up risks, but the slow recovery in demand during the peak season of September and October is currently unable to provide effective support for spot prices. Overall, the polypropylene market is likely to remain volatile and weak in the short term.

Domestic PP Index: According to Tuduoduo data, the domestic PP spot index was 6791.00 on September 24, down 19 points, or 0.28%.

GuoNeng Coal Chemical's auction volume today was 2,176.45 tons, a 104.17% increase from yesterday; 1,797.125 tons were sold, an 82.45% increase from yesterday, and the sell-through rate was 82.57%, a 9.83% decrease from yesterday.

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