This week's market analysis

This week, the recycled PP market prices continued to stabilize and consolidate, with a lackluster trading atmosphere. Downstream demand was average, and the motivation for recycled manufacturers to sell was limited. The trend in the new material market was weak, providing insufficient support to the recycled market. Moreover, downstream product companies showed limited enthusiasm for inquiries, and the restocking atmosphere was weak. Currently, actual orders are slow, and negotiations on specific deals dominate. As of March 20th, the mainstream reference price for high-quality white transparent first-grade pellets in Shandong is 5800-5900 yuan/ton; in Hebei, the mainstream reference price for high-quality white transparent pellets is 5450-5550 yuan/ton, with no change from the previous period.

2. downstream dynamics

This week, the domestic polypropylene downstream industries (including woven plastics, injection molding, BOPP, PP pipes, PP nonwoven fabrics, CPP, transparent PP, and modified PP, a total of 8 downstream industries) showed a steady upward trend in average operating rates compared to last week. During the week, due to unstable geopolitical situations, the potential risk of supply increased, causing oil prices to stop falling and start rising, and the overall market sentiment improved. On the raw material side, the PP market did not change much, providing limited support for product costs. From the demand perspective, with the arrival of the golden March period and the rise in temperature, the PP products industry entered the traditional peak season, with market demand continuously improving, and order volumes may continue to increase. On one hand, seasonal consumption combined with favorable policies, such as trade-in subsidies, has led to high enthusiasm in the home appliance industry; on the other hand, the increase in daily travel by residents due to warmer spring temperatures has boosted consumption in food, beverages, disposable hygiene products, and daily necessities. The commencement of construction projects has driven up sales of woven plastic bags and PP pipes, with PP product orders continuing to heat up. The average operating rate of the industry increased by 0.46 percentage points to 50.44% (Note: The average operating rate is the arithmetic mean of the above-mentioned PP industries).

3. This week's market focus

Supply forecast: The supply of high-quality raw materials remains consistently tight, while negotiations for the release of mid-to-low-end goods are ongoing. The cost of purchasing raw materials is high, and recycling companies are cautiously increasing their operations. Overall, the supply side can still maintain a balanced state.

2) Demand Forecast: The new material market situation is difficult to improve, providing insufficient benefits to the recycled market. Market demand has not been released as expected, and there is currently no significant positive news supporting the market. Overall, it is difficult for the market to see substantial improvement.

3) Cost analysis: Although the supply of upstream raw materials is tight, cost support is weakened due to buyers' price pressure, leading to a decrease in support for recycled materials. Recycled material enterprises operate flexibly and handle their operations cautiously.

4. next week market forecast

The current recycled plastic market continues to be in a wait-and-see mood, with downstream product manufacturers replenishing stocks as needed, and demand is being released slowly. At present, the raw material maintains a tight supply and high price situation, making the granulation cost for recycling plants high, thus squeezing their profit margins. The market price of new PE material is under pressure and declining, providing insufficient support to recycled materials, leading to a general performance of the recycled PE market, low purchasing enthusiasm from downstream, and a lack of clear positive support, resulting in weak upward momentum in prices. The recycled PP market continues to show a steady but slightly weak trend, with the price of new PP material also on the weaker side, and the price gap between new and old materials remains at a low level, which is unfavorable for the trading of recycled materials. There are only a few new orders within the market, and recycling enterprises are flexibly scheduling production and cautiously quoting prices. It is expected that in the short term, the price of recycled plastics may maintain a consolidation trend, with caution towards high-price transactions.