August 29, 2024 – The recent notable decline in international oil prices has exerted a subtle influence on the PP/PE market. As external positive news weakens, the PP/PE market trend exhibits a generally stable yet slightly volatile pattern. In the face of obstacles posed by high-price transactions, merchants generally adopt a cautious price-supporting strategy while maintaining a wait-and-see attitude.
According to AsiaMB, the PP and PE markets have recently undergone minor adjustments, with price fluctuations of around 50 yuan per ton. Yesterday, international oil prices fell significantly, affecting the spot market quotes to some extent. Meanwhile, in the futures market, the trend of PP and PE is becoming weaker, and the bearish sentiment in futures prices further affects market confidence.
However, in terms of petrochemicals, the continuous decline in inventories reflects the strengthening demand in the plastics market. Despite the negative impact brought by the fall in oil prices, the confrontation between the significant reduction in petrochemical inventories and the increasing market demand has kept PP and PE prices within a narrow range.
From the perspective of market prices, the mainstream linear prices, LDPE prices, and PP market quotes all show a slight upward trend. Specifically, mainstream linear prices have risen to varying degrees in different regions, while LDPE prices and PP market quotes also exhibit similar trends.
Regarding the macro environment, the Fed’s expectation of interest rate cuts has gradually increased, which has boosted the spot market quotes for plastics to some extent. In terms of supply and demand, although the restart of several petrochemical plants has led to a slight increase in supply, the recovery of agricultural film demand and the upcoming peak season, known as “Golden September and Silver October,” have improved downstream orders. However, compared to the same period in previous years, demand remains weak, and the inventory reduction speed has slowed down, resulting in high inventory pressure in the short term.
In summary, despite the impact of lower oil prices, weakening futures, and diminishing external positive news on the PP/PE market, the overall market remains stable, and merchants generally adopt a cautious wait-and-see attitude. It is expected that the PP and PE markets will continue to undergo minor adjustments in the near future.