Macro Policies Boost July, August Polypropylene (PP) Market Outlook

Data source: Jinlianchuang

7Month, beginning of the monthPPFutures performance is lackluster, with petrochemical and CNPC enterprises lowering ex-factory prices, causing cost support to weaken. The spot market sentiment has turned cautious, and traders are offering lower quotations. Although there are concentrated plant maintenance shutdowns on the supply side,7The month is traditionally a low season for polypropylene consumption, with continued weak demand, resulting in a sluggish trading atmosphere in the market. The demand side provides little support for raw material prices, causing the destocking process upstream to be slow. In the latter part of the month, the release of "anti-involution" signals from the national level provided a positive boost to market sentiment.PPFutures briefly turned positive, and traders' offers rose slightly with caution. However, downstream factories prioritized digesting previous inventories and remained hesitant about purchasing high-priced raw materials. At the end of the month, policy support for the market weakened, leading most merchants to adopt a cautious and wait-and-see attitude. Trading activity was limited, and the market tended to consolidate.

August Market Forecast: Supply Increases While Demand Remains Weak, Weak Market Pattern Unlikely to Change

Supply side: Ningbo Daxie Petrochemical polypropylene units (two production lines respectively)45 /The project is scheduled to commence production in (year), and as output gradually increases, it will impact prices in the East China region; there are no new facility start-up plans in other regions, so the growth rate of regional supply will slow down.

Demand side:8Late in the month, due to the impact of the autumn harvest, agricultural films, etc.PEThe downstream takes the lead in warming up, but forPPLimited driving effect; in addition, plastic weaving, etc.PPDownstream major industries are expected to see a slight increase in demand, which may affect...PPForm a temporary support.

On the export side: Overseas demand is weakening and enterprise restocking is limited; in addition, high ocean freight rates are squeezing factory profits, so export orders are expected to face obstacles.

Overall,8There is an expectation of the launch of domestic polypropylene units in the coming months, and the introduction of new production capacity will continuously increase the supply pressure.8In this month, only a few units such as Shenhua Xinjiang and Fushun Petrochemical are scheduled for maintenance. The massive production capacity base cannot be shaken in the market, and most industry participants hold a cautious attitude towards polypropylene prices, with overall market sentiment remaining cautious. Therefore, it is expected that...8The polypropylene market experienced weak fluctuations this month.