September 10, 2024 – The PP (polypropylene) market continues to exhibit a weak and oscillating trend, lacking favorable drivers due to the weak cost side and a stalemate in supply and demand dynamics. Under cost pressures, numerous manufacturers have had to reduce their ex-factory prices, with no signs of recovery on the horizon.
Internationally, the situation in Libya’s oil sector has caused international oil prices to plummet to their lowest point this year, further exacerbating the market’s pessimistic sentiment. Although supply-side issues are gradually recovering, the overall cost side remains weak, lacking significant upward momentum despite the existence of a bottom support for international oil prices.
In terms of inventory, the accumulation at the beginning of the month has led to increasing supply pressure. With previously repaired facilities gradually returning to the market, overall supply has stabilized, but demand growth has been sluggish. Although some end-user enterprises have received new orders, the overall growth rate is slow, and new orders are not sustainable. Additionally, the overall trading atmosphere in the market is currently subdued, and traders are facing difficulties in reducing their inventories.
However, there are also some positive signs emerging. As the peak season approaches in September, the downstream market is expected to gradually improve. Driven by holiday consumption and stockpiling, orders for certain plastic weaving and packaging products have shown a slight increase. It is anticipated that demand will gradually recover in the short term, and market sentiment is likely to be boosted.
According to insights from the Color Masterbatch Industry Network, despite the current challenges facing the PP market, the overall support range for international oil prices still exists, and a rebound is possible in the future. Furthermore, with the arrival of the peak demand season in September and the gradual recovery of the downstream market, it is expected that the short-term market, after hovering around the low range of 7,350-7,450 yuan/ton, may see potential for a rebound. Investors should closely monitor Friday’s US non-farm economic data and changes in domestic downstream demand.