June E-Commerce Winds Rise, Membrane Prices Steadily Advance

Introduction: As we enter late May, the preheating atmosphere for the 618 shopping festival is gradually intensifying, downstream stocking demand is gradually being released, and many CPP production facilities have resumed operation, leading to a continued recovery in industry operating rates. However, end-user purchasing remains limited to just basic needs, with a weak willingness to stock up in the market, resulting in a slight accumulation of finished product inventory. Coupled with high prices for PP raw materials, the cost support remains firm but also restricts upward movement, creating an overall weak and stable market pattern. In East China, prices for low-temperature composite films have seen a slight increase, while the trends for general films remain flat. High-end product prices remain firm, and the overall market is characterized by weak fluctuations with limited volatility.

Cost pressure eases, order increases, and membrane prices rise slightly in response.  

With the decline in PP raw material prices, the production costs of low-temperature composite films have decreased, leading to an improvement in profitability. Coinciding with the downstream preparation for the 618 shopping festival, order volumes have steadily increased, allowing manufacturers to slightly raise prices to make up for previous profit gaps. The downstream market has shown a high acceptance level for the slight price adjustments.

Since May, the CPP market has shown a narrow range-bound trend overall, with a relatively steady pace of operation. Affected by the continued decline in upstream PP raw material prices, the market faced certain downward pressure. However, pre-stocking by downstream buyers ahead of the June 18 shopping festival provided phased support, limiting the decline. Product differentiation was evident: low-temperature composite film prices eased slightly in line with the market, with transaction price ranges moving lower; while high-end products such as retort film maintained firm quotations supported by stable demand. Throughout the month, there were no sharp rises or falls, and the market mainly operated in a weak but stable manner. As of May 28, the price of ordinary composite film was 11,650 yuan/ton, while the price of low-temperature composite film was 12,000 yuan/ton.

Insufficient demand release; CPP operating rates edged down.

Within the month, CPP production and operating rates rose simultaneously, with the CPP industry operating rate at 46.20%, down 0.68 percentage points from the previous period. On the one hand, the industry has entered the transition period between peak and off-peak seasons, and overall terminal demand has been sluggish. Although 618 stockpiling has led to a partial rebound in demand for low-temperature composite film, it has been difficult to reverse the weak overall market transactions. Downstream customers are generally cautious in placing orders, and production enterprises have proactively reduced operating loads.

On the other hand, earlier declines in raw material prices significantly improved industry profitability, and some companies took the opportunity to carry out equipment maintenance, further dragging down overall operating rates. At present, market supply is ample, the supply-demand balance is loose, and companies have no intention of increasing production schedules. Affected by the decline in operating loads, the industry’s overall output has also edged down.

The market is in a wait-and-see mood, and film manufacturers’ raw material inventories have tightened.  

The average raw material inventory days in the CPP industry within the month were 5.16 days, down 2.27% month-on-month. According to Longzhong Information Understood. In May, PP raw material prices fluctuated downward, market bearish sentiment intensified, and film manufacturers mainly made rigid-demand purchases rather than stockpiling in large quantities. On the production side, although industry operating rates declined slightly, there were no large-scale shutdowns overall, and raw materials continued to be consumed steadily. Reduced procurement combined with ongoing consumption led to a gradual decrease in companies’ raw material inventories, ultimately driving inventory days lower.

Cost and demand double benefits, June CPP market fluctuates upward.

Future Prediction:In June, the CPP market showed overall fluctuations and strengthened. The concentrated maintenance of upstream PP facilities impacted the market, stabilizing raw material costs. Additionally, the 618 e-commerce event and the pre-Duanwu Festival led to concentrated replenishment by downstream buyers, resulting in active market transactions. The industry's operating rate has steadily increased, with ample orders in the market and extended order cycles. Spot inventory remains low, and supply is tight. The mainstream transaction price range for low-temperature composite films is 11,900-12,200 yuan/ton, with boiling films and aluminum-coated films performing stronger than regular films. However, due to high prices, the end-user procurement mentality is relatively cautious, limiting the upward price potential.