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Polypropylene: Plant Maintenance Approaches, PP Market May Encounter a New Turning Point for a "Comeback"

Zhuo Chuang 2025-03-04 14:41:45

Compared with the PP market after the Spring Festival in previous years, the market performance in 2025 after the Spring Festival is a bit "cool." Entering March, there is an increase in the number of maintenance operations at production facilities, and the short-term market outlook may be cautiously optimistic.

Compared to the PP market after the Spring Festival in previous years, the market performance after the Spring Festival in 2025 is a bit "cool". The February market was like "boiling a frog in lukewarm water" in a range of shocks, but as we entered March, there was an increase in concentrated maintenance equipment on the supply side, which may provide some support for the market.

PP weakened as it was difficult to find support in the February venue.

As of February 26, the average price of domestic PP (polypropylene) in the East China region was 7,405.29 yuan/ton, a decrease of 0.41% month-on-month, and the average market price for copolymer was 7,667.65 yuan/ton, a decrease of 0.86% month-on-month. After the holiday, downstream factories mainly purchased raw materials on demand, which provided limited support to the market. At the same time, with some installations resuming operation, the supply pressure in the front-end market increased. In addition, the recovery pace of the downstream PP sectors was slow, and even though the operating load gradually increased, it mainly consumed the stock from the previous period, and the actual demand was limited, which did not significantly drive the market situation. Some stockholders faced significant inventory pressure and actively reduced their offers to facilitate transactions. Moreover, the continuous decline in PP futures in the middle and lower reaches also had a noticeable impact on market sentiment, causing PP prices to drop and market transactions to be weak. The market fundamentals continued to drag on the market, and the market urgently needed a "stimulant" to relieve pressure.

The delay in new production capacity combined with concentrated equipment maintenance alleviates supply pressure.

Despite a large number of new installations planned to start production in 2025, there is not much pressure for the first quarter. The production start-up of Jincheng Petrochemical and Inner Mongolia Baofeng Petrochemical's new installations is not yet clear, and in April, only the ExxonMobil Huizhou ethylene project is planned for trial operations. Overall, the capacity release is limited and will not have a significant impact on the market. However, since the Spring Festival until the end of February, the daily shutdown rate of PP filament is around 15.07%. The main reason for the alleviation of the basic pressure is the increasing number of maintenance installations in upstream production enterprises.

Starting in March, the concentrated maintenance season for the first half of the year is approaching, and the favorable factors on the supply side will continue. The number of maintenance facilities is expected to increase. It is estimated that the production loss from PP facilities in March will be 581,000 tons, an increase of 17.37% month-on-month. In addition to existing maintenance facilities, it is anticipated that 8 petrochemical companies will enter planned maintenance. Among them,********, Hainan Refinery, and Pucheng Clean Energy are expected to conduct long-term maintenance of over 45 days on their PP facilities. This will not only reduce the operating load of polypropylene facilities but may also alleviate some of the pressure on the supply side of the market.

In the short term, although the confidence in the demand side among industry insiders is weaker than in previous years, expectations remain for the first demand point. Starting from March, planned maintenance of equipment is expected to increase, and the mass production of new capacities is uncertain, which may lead to a reduction in domestic market supply. From a macro perspective, the convening of the "Two Sessions" may provide a more positive signal for the market, and the short-term market outlook is cautiously optimistic. It is expected that after a period of fluctuating consolidation, PP may face a rise again.

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Polypropylene: Plant Maintenance Approaches, PP Market May Encounter a New Turning Point for a "Comeback"

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