Off-Season Slightly Drags Down, Recycled PP Expected to Fluctuate Within Range

Market Overview

In late June 2026, China’s domestic recycled PP market showed a pattern of firm cost support at the bottom and slightly weakening demand during the off-season. Spot price fluctuations narrowed, and trading in the market was mainly driven by rigid demand. According to Longzhong Information’s industry chain monitoring data for late June, upstream supplies of recycled PP woven bags and waste modified materials were regionally differentiated, while procurement costs for unprocessed scrap rose rigidly. Downstream sectors such as plastic weaving, automotive compounding, and daily-use injection molding entered the traditional summer off-season, with bulk orders shrinking. However, compliant PCR-PP demand from the automotive and new energy sectors continued to provide solid underlying support. During the same period, virgin PP futures remained weak and fluctuated within a narrow range, offering limited guidance. Supported by end-user demand from the compounding sector, the overall recycled PP market showed significantly stronger resilience than recycled PE and is expected to maintain range-bound fluctuations in the short term.

II. Supply Side: The circulation of waste PP remains stable, and the operating rate of granulation is maintained at a low level of 40%.

Scrap Recycling Stage

In the concentrated manufacturing areas of East and South China, there is an ample supply of waste PP woven bags and appliance scrap materials, leading recyclers to lower their purchase prices. In the northern and inland regions, individual recyclers show insufficient enthusiasm for collection, resulting in no significant increase in the overall circulation of waste PP raw materials nationwide. The costs of labor, short-distance logistics, and warehousing are rising simultaneously, creating a rigid bottom line for waste PP purchase prices, which in turn raises granulation processing costs and compresses the processing profits of enterprises.

Recycled pelletizing enterprise

Domestic recycled PP pelletizing plants are generally operating around the break-even point, with raw material costs difficult to pass downstream. Enterprises are proactively reducing production loads, and the industry’s average operating rate remains stable at 40%. Large-scale companies rely on long-term fixed orders for modified materials to maintain stable production; small and medium-sized workshops adopt a just-in-time purchasing and production model, without stockpiling PP finished pellets.

At the inventory level, the finished product inventory of pelletizing plants and traders in recycled PP remains in a neutral and reasonable range, with no strong incentive for concentrated destocking or restocking, making it unable to drive a unilateral price movement.

III. Demand Side: Traditional Plastic Weaving Demand Weakens, Modified PCR Materials Provide Long-Term Support

From June to August each year is the traditional off-season for the PP downstream industry. According to the terminal monitoring quantitative data from Longzhong Information in mid-June, the operating rate of the plastic weaving industry is 41.52%. Small and medium-sized plastic weaving factories in Shandong and Jiangsu-Zhejiang are experiencing phase-specific shutdowns, with both month-on-month and year-on-year operating rates declining. Daily-use injection molding companies have an average order backlog of 6 days, and the shipping pace has slowed down. The cost transmission at the plastic weaving terminals is hindered, with raw material procurement only meeting daily essential needs, and no advance stockpiling is taking place.

In marked contrast to recycled PE: policies requiring new energy vehicle interiors and modified plastics producers to incorporate PCR recycled materials continue to be implemented, establishing clear long-term stable demand for compliant recycled PP. However, due to the fixed cycles required for production line upgrades and carbon footprint certification, the release of new orders has been gradual and cannot offset the decline in the woven packaging off-season, though it can effectively anchor the price floor and prevent a sharp decline.

IV. Summary