Post-Holiday Inventory Pressure Leads to Continued Decline in PP and PE Spot Price Indices

The South China PP price index is 6849.61 points, down 189.1 points from before the holiday, a decline of 2.69%. Among them, the price of drawn wire fell by 200, fiber dropped by 250, copolymer decreased by 100, thin-walled dropped by 150, and homopolymer fell by 170.

The South China PE price index stands at 7733.91 points, down 42.75 points from the previous period, a decrease of 0.55%. Among them, linear fell by 50, low pressure by 40, and high pressure by 30.

After the holiday, the market is facing significant inventory accumulation pressure, coupled with the continued decline of crude oil prices on the cost side, leading to a continued drop in the polypropylene spot price index.

At the macro level, economic data overall remains stable and positive, but geopolitical factors continue to disrupt the market. The year-on-year growth in export data for September has expanded, demonstrating the resilience of China's foreign trade. While exports to the U.S. have decreased year-on-year, China’s exports still maintain growth. However, after the holidays, Trump once again threatened to impose additional tariffs on China, which also adds uncertainty to the foreign trade situation in the fourth quarter.

In terms of fundamentals, the supply and demand pressure continues, and there is a noticeable accumulation after the festival. However, there are few maintenance activities on the supply side, and the output level remains high. Downstream demand procurement is still primarily based on just-in-time needs.

Looking ahead, the macroeconomic and fundamental conditions continue to improve, but supply and demand pressures still exist. Attention will be paid to whether oil prices can stabilize, the maintenance schedules of petrochemical enterprises, and whether downstream procurement on the demand side can increase. It is expected that the price index for PP in South China will be 6700-7000, and the price index for PE will be 7600-7800 next week.