September 10, 2024 – China’s petrochemical inventory data reveals that the polyolefin stockpile of the two major oil companies has surged to 810,000 tons, marking an increase of 85,000 tons from the previous week. On the futures front, the PP2501 contract exhibited volatility on September 9th, with an opening price of 7341, reaching a daily high of 7354 and a low of 7268. The final open interest stabilized at 481,555 contracts, while the settlement price closed at 7310, down 43 points from the previous day’s settlement.
The domestic PP spot market remained steady today, with prices across various regions showing no significant changes. Currently, the mainstream price range for polypropylene in China is hovering between 7400 and 7680 yuan per ton. However, the sustained weakness in international oil prices and a sharp decline in propylene market prices have impacted the supportive influence on the cost side. On the supply front, the resumption of operations at Dongguan Juzhengyuan’s first and second phases, as well as Zhejiang Petrochemical’s PP units, has led to an increase in market supply. Yet, downstream buyers remain cautious, primarily engaging in need-based purchases. Overall, influenced by a bearish market sentiment and a downward trend in the futures market, the spot market appears relatively subdued.
Regarding the future outlook for PP spot prices, developments in raw materials warrant attention. With U.S. employment data falling short of expectations, market concerns about the economy have intensified. Meanwhile, persistent pressure on the demand side for crude oil has caused international oil prices to continuously hit new lows for the year, potentially weakening the cost support for the PP market. On the supply side, there are few planned maintenance shutdowns for PP production facilities in the short term. Moreover, with the successive resumption of operations at Sino-Han Petrochemical and North Huajin, market supply is expected to trend upward. On the demand side, although terminal demand recovery is slow, traditional demand from downstream sectors such as plastic weaving and injection molding is anticipated to gradually improve. Taken together, the polypropylene market is likely to experience a period of consolidation in the short term.
Furthermore, according to data calculations by Tuoduo, the domestic PP spot index stood at 7515.00 on September 9th, remaining stable without any fluctuation. Meanwhile, in today’s auction, Shenhua Coal Chemical saw a slight decrease in auction volume, with both transaction volume and success rate declining compared to the previous day, reflecting a cautious market sentiment.
AsiaMB has learned that the industry is currently closely monitoring the trend of international oil prices and the resumption of domestic PP unit operations, as these factors will directly impact the subsequent market. Amidst the complex and ever-changing market environment, all parties need to keep a close eye on industry dynamics to make more informed decisions.