[PP Weekly Review] Weak Demand Hinders Polypropylene Market, Leading to Weak and Fluctuating Prices

1. This week's market focus

Production: This week, the domestic polypropylene output was 732,600 tons, a decrease of 44,800 tons from last week's 777,400 tons, with a decline rate of 5.76%. Compared to the same period last year, which was 642,500 tons, it increased by 90,100 tons, with a growth rate of 14.02%.

2) Demand: The raw material inventory days of large enterprises in the plastic weaving sample increased by 2.60% compared to last week; the raw material inventory days of BOPP sample enterprises decreased by 5.39% compared to last week. The raw material inventory days for modified PP increased by 0.79% compared to last week.

3) according toStatistics, this week China's polypropylene commercial inventory decreased by 0.84% compared to the previous period, total inventory of production enterprises increased by 0.66%; sample trader inventory increased by 3.23%: sample port warehouse inventory increased by 2.70%. By product type, filament grade inventory increased by 0.95%; fiber grade inventory decreased by 3.05%.

2.weekly market analysis

This week, the polypropylene market remained relatively stable.Due to unstable geopolitical situation, the potential supply risk has increased, leading to a rebound in oil prices and a recovery in the market's macro sentiment. Fundamentally, with multiple facilities undergoing temporary shutdowns, the utilization rate of polypropylene capacity has dropped to a relatively low level. The pressure from new capacity expansions is offset by maintenance, temporarily alleviating supply pressures; demand remains stable, with domestic demand pressure still present while export opportunities continue to open up. Overall, as concerns over crude oil diminish and the fundamental landscape improves, polypropylene enters a short-term consolidation phase under a pattern of reduced supply and stable demand. As of the 20th, the national average price for drawing yarn stands at 7325 yuan/ton, a decrease of 20 yuan/ton from last week, representing a 0.27% decline.

 3.market impact factors

This week (March 14-20, 2025), the loss of PP facilities was 224,270 tons, an increase of 25.10% from last week; among which, the loss due to maintenance was 159,840 tons, an increase of 60.43% from last week; the loss due to reduced load was 64,430 tons, a decrease of 19.24% from last week.

 4.next week market forecast

Supply forecast: It is expected that the supply side will show a trend of reduction, mainly due to the concentrated maintenance of facilities such as Pujin Energy Chemical Line 2 and Maoming Petrochemical Line 2, leading to a future situation of reduced supply. Recently, the enterprises undergoing maintenance are mainly concentrated in Pucheng Clean Energy, Anqing Baiju, Zhongjing Petrochemical Phase II Line 1/Line 2, and Yulong Petrochemical.

Demand forecast: Mainly driven by downstream rigid procurement, due to the impact of a weak global economy and overseas tariffs on some downstream export orders, under the dual pressure of reduced domestic and international orders, the willingness of downstream raw material procurement for restocking is low. According to plastic weaving data, the raw material inventory days of large enterprises in the plastic weaving sample increased by 2.60% compared to last week; the raw material inventory days of BOPP sample enterprises decreased by 5.39% compared to last week. The raw material inventory days of modified PP increased by 0.79% compared to last week.

Cost forecast: Cost support still exists, although there is an expectation of easing in international oil prices, due to the recent geopolitical benefits leading to a climb from the low position of international oil prices; propane follows the trend of international oil prices with recent downstream market entry supporting the price; propylene has limited high-level transmission recently and mainly remains stable in the short term.

Overall, the continuous expansion and increase in supply contrast sharply with the weak demand. The imposition of additional tariffs overseas has suppressed downstream export orders, coupled with a slow increase in domestic demand, dragging down the mainstream market transactions. The market's bottom support lies in the relatively stable cost side and the continued benefits of maintenance, alleviating downward pressure on the market. In the short term, the market will revolve around the confrontation and game between supply and demand and the cost side. It is expected that the short-term market will fluctuate weakly within the range of 7250-7450 yuan/ton, with close attention to changes in additional tariffs overseas, progress in destocking of social inventory, and the status of demand-side variables.