[PP Daily Review] Macro And Supply-Demand Competition Lead To Weak And Volatile Polypropylene Market

1 Today's Summary

Sinopec North China made individual adjustments, Yanshan Petrochemical 4912 was reduced by 200 to 9,250 yuan.

Today, the domestic polypropylene shutdown impact increased by 0.41% compared to yesterday, reaching 16.73%. The daily production proportion of spun-grade decreased by 0.73% compared to yesterday, standing at 28.25%. The daily production proportion of low melt copolymer increased by 0.08% compared to yesterday, reaching 6.56%.

③（20250718-0724） The supply-demand balance in this period remains in a state where supply exceeds demand. ， The supply-demand gap remains positive but has slightly narrowed, alleviating some of the negative impact on market sentiment. In the next period, the oversupply situation in the supply-demand balance is expected to significantly expand, further intensifying the bearish impact on prices.

2 Spot Overview

Table 1 DomesticPolypropylene PriceSummary Table (Unit: Yuan/Ton)

Data source:Longzhong Information

Based on East China as the benchmark, today's polypropylene raffia closed at 7,117 yuan/ton, down 14 yuan/ton from yesterday. The national average price of raffia is 7,137 yuan/ton, down 12 yuan/ton from yesterday, in line with earlier expectations. Futures experienced narrow fluctuations and consolidation today, with some market prices declining. The enthusiasm for receiving goods at the terminal is limited, which has dragged down the mainstream transactions in the market. Merchants are offering discounts to promote transactions. It is expected that the market will ease from its high level and return to a rational price in the near future. As of midday, the mainstream price for East China raffia is between 7,100-7,180 yuan/ton.

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

3. Spot-Futures Basis

From the basis perspective, the polypropylene basis in East China today is -30 yuan/ton, down 14 yuan/ton from yesterday; the basis in North China is -22 yuan/ton, down 12 yuan/ton from yesterday.

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 remained stable at 77.42%. The profit from oil-based production decreased by 131.75 yuan/ton compared to yesterday, reaching -414.9 yuan/ton.

Figure 5 Domestic Polypropylene Capacity Utilization Trend Chart	Figure 6 Domestic Polypropylene Profit and Price Trend Chart (Unit: RMB/ton)
Source of data: Longzhong Information	Source of data: Longzhong Information

5 Market sentiment

Favorable policies have boosted market sentiment, but the supply and demand fundamentals have weighed it down, with bullish and bearish factors intertwined. There is pressure on the supply side but also supporting factors, while weak demand persists, resulting in a lackluster pattern. Market participants remain cautious and largely on the sidelines.

6 Price Prediction

The speculative atmosphere at the macro policy level has somewhat diminished, with enterprises experiencing both maintenance shutdowns and resumptions, balancing the positive impact of maintenance with concerns about capacity expansion. The demand side provides limited support for spot prices. Affected by the macroeconomic and supply-demand dynamics, the short-term market needs to find a balance between high costs and weak demand. Considering the overall pros and cons, the market is expected to fluctuate between 7,080-7,180 yuan/ton in the short term to test transactions.

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)

Source of data: Longzhong Information