[PP Weekly Review] Macro Positive Factors Drive Market, Polypropylene (PP) Prices Rebound

1.  This Week's Market Focus

1 ProductionThis week, domestic polypropylene production reached 773,600 tons, a decrease of 3,300 tons (0.42%) compared to last week's 776,900 tons; however, it increased by 120,600 tons (18.47%) compared to 653,000 tons in the same period last year. Production losses among manufacturers remained high during the week, with no new capacity additions, resulting in only a narrow adjustment in polypropylene output.

2 ） The average operating rate of the downstream polypropylene industry decreased by 0.07 percentage points to 48.45%.Polypropylene priceThe increase provides some support for polypropylene products. However, the off-season effect in end-user consumption will become more pronounced, and demand is expected to remain weak.

3 Inventory: As of July 23, 2025, China's total commercial polypropylene inventory stood at 814,400 tons, an increase of 33,200 tons from the previous period, up 4.24% month-on-month and 17.60% year-on-year. Producers' total inventory increased by 2.62% month-on-month; sample traders' inventory rose by 9.36% month-on-month; and sample port warehouse inventory grew by 6.50% month-on-month. By product type, raffia-grade inventory increased by 2.05% month-on-month, while fiber-grade inventory rose by 3.29% month-on-month.

2. This Week's Market Analysis

In this period, the spot price of polypropylene is running strong, with a price fluctuation range of 7099-7141 yuan/ton. Domestic efforts to counter internal competition are being promoted, with baseline assessments of outdated units in the petrochemical industry and inspections of coal mine production organized by the National Energy Administration gradually underway. The black commodity sector leads the market gains, with polypropylene prices rising due to coal cost pressures and expectations of reduced supply. However, the supply-demand structure remains unchanged, demand-side follow-up is weak, market transactions are concentrated mainly among intermediaries, and inventories have accumulated over the week. 。

3. Market Influencing Factors

The current supply-demand balance maintains a pattern of supply exceeding demand, with the surplus remaining positive but slightly narrowing, which somewhat eases the bearish impact on market sentiment. In the next period, the surplus in the supply-demand balance is expected to expand significantly, likely intensifying the bearish impact on prices.

4. Market forecast for next week

The expected increase in polypropylene consumption for the next period will maintain the supply and demand trading logic, focusing on identifying the transaction center of gravity. Key Focus: 1. Expectations of increased supply: Yulong Petrochemical's first production line will shut down within the week, and Zhejiang Petrochemical's third production line will start up within the week. The ongoing supply and demand interactions continue to drive market variables. 2. Weak demand: Both domestic demand and exports are under pressure. Downstream general products such as woven plastics and plastic films are in the off-season, and insufficient order follow-up is dragging down market transactions. 3. Cost-side easing expectations: With OPEC+ production increase expectations and easing geopolitical tensions, international oil prices are expected to ease; Saudi Arabia's CP prices are expected to decline in August, leading to a loosening of cost support from PDH production. 。