[PP Daily Review] End Of Month Supply And Demand Marginal Improvement, Polypropylene Supply And Demand Game Cautiously Seeks Increase

1. Today's Summary

①, Sinopec Southwest PP Price Adjustment: Raffia decreased by 150 RMB/ton, Ningxia NX40S decreased by 150 RMB/ton, set at 7100 RMB/ton; Lanzhou 9018 decreased by 200 RMB/ton, set at 6950 RMB/ton; Sichuan Chemical 36D decreased by 70 RMB/ton, set at 6800 RMB/ton.

Today, the domestic polypropylene shutdown impact has increased by 0.60% compared to last week, reaching 19.62%. Zhejiang Petrochemical’s four-line 450,000 tons/year facility started over the weekend, with an expected increase in daily supply by 1,350 tons. The daily production proportion of yarn-grade polypropylene has increased by 1.62% compared to last week, reaching 25.52%. The main reason is the switch to yarn production at Donghua Maoming's 400,000 tons/year, Zhejiang Petrochemical's first line of 450,000 tons/year, and Donghua Ningbo's first line of 400,000 tons/year, with an expected decrease in yarn production by 3,750 tons/day.

③、（20251017-1023） The supply-demand balance in this period continues to show a tight balance, which has boosted market sentiment. In the next period, the supply-demand imbalance is expected to expand due to supply growth not meeting expectations and increased demand, which is anticipated to have a positive impact on prices.

Spot Overview

East China Sea Based on the region as a benchmark, today's polypropylene raffia closed at 6,610 yuan/ton, up 2 yuan/ton from last week. The national average price of raffia also increased by 2 yuan/ton from last week, representing a 0.03% increase, in line with the morning forecast.

Futures opened higher today and fluctuated slightly lower. In the morning, most market quotations fluctuated and consolidated, with a slight increase of 10 yuan/ton in low prices in East China. At the end of the month, market resource consumption and sellers' sales pressure eased. Intensive maintenance alleviated market supply and demand pressure. The tug-of-war between supply-demand and cost is ongoing, and the market is expected to experience weak fluctuations in the near future, with opportunities for low prices to rise. As of midday, the mainstream price of raffia in East China was between 6560-6650 yuan/ton.

Figure 1 Domestic Polypropylene Price Trend (Unit: Yuan/Ton)	Figure 2 Domestic Polypropylene Prices in Various Regions (Unit: Yuan/Ton)
Data source: Longzhong Information	Data Source: Longzhong Information

3. Futures-Spot Basis

Based on the basis, today's polypropylene basis in East China is -72 yuan/ton, down 1 yuan/ton from last week; in North China, the basis is -93 yuan/ton, an increase of 8 yuan/ton from last week.

Figure 3 Basis Trend in North China (Unit: Yuan/Ton)	Figure 4: Basis Trend in East China (Unit: Yuan/Ton)
Data Source: Longzhong Information	Data Source: Longzhong Information

4. Production Dynamics

The polypropylene capacity utilization rate increased from 76.83% yesterday to 77.05% today, an increase of 0.22%. Zhejiang Petrochemical's four-line 450,000-ton per year unit started over the weekend, with an expected daily production increase of 1,350 tons. PP profits decreased by 3.18 yuan/ton from last week to -655.1 yuan/ton.

Figure 5 Trend Chart of Domestic Polypropylene Production Capacity Utilization Rate	Figure 6 Domestic Polypropylene Profit and Price Trend Chart (Unit: Yuan/Ton)
Data Source: Longzhong Information	Data source: Longzhong Information

5. Market Sentiment

At the end of the month, market inventory is basically depleted, and businesses have certain expectations for the future market. However, due to the weak economic conditions this year, market supply transactions are being suppressed. As a result, businesses and factories mainly maintain a cautious approach, keeping low inventory and a fast-paced shipping strategy.

6. Price Prediction

Supply and demand marginal improvements, macro policy direction established by the Fourth Plenary Session to set economic goals, and market sentiment uplift. However, the mismatch between supply and demand in the polypropylene industry is difficult to resolve quickly. Although short-term maintenance may provide some positive momentum, it has minimal impact given the vast capacity base. Additionally, on the export front, international trade barriers restrict downstream product shipping orders, creating a bearish pressure on the domestic market. Under the intense short-term supply-demand game, the market is expected to fluctuate around 6560-6700 yuan/ton with potential upward movement opportunities.

7. Relevant Product Information

Table 2 Summary of Prices for Polypropylene Related Products (Unit: Yuan/Ton)

Data source: Longzhong Information

8. Data Calendar

Table 3 Overview of Domestic Polypropylene Data (Unit: 10,000 tons)

Data source: Longzhong Information