According to the Commodity Market Analysis System of the Business Society, the PP market fluctuated in June, with overall fluctuations in various wire drawing brands. As of June 30th, the mainstream quoted price of T30S (wire drawing) by domestic producers and traders is around 7164.29 yuan/ton, with a+1.11% increase or decrease compared to the average price level at the beginning of the month.

Cause analysis

Industry chain: On the upstream side, the domestic propylene (Shandong) market fell first and then rose in June, with a slight overall increase. In the first ten days, downstream buying was poor, and the price of propylene gradually fell to a low point. Downstream bargains entered the market, and the effect of enterprise destocking was significant. In the latter half of the year, procurement improved, while some propylene enterprises underwent temporary maintenance, resulting in a temporary decrease in market supply and a push up model for propylene. The current inventory in the propylene market is controllable, and demand changes are limited. It is expected to maintain a narrow consolidation operation in the short term.

Propylene prices rebounded after a drop, while international crude oil fluctuated frequently this month, with limited cost support for PP. In terms of industry load, the overall industry load remained between 70-80% this month, with construction approaching 79% at the end of the month, reaching an overall high level. The overall supply of goods remained stable. There is sufficient supply of goods on site. In terms of demand, it tends to be weak, with the main downstream plastic weaving production fluctuating from 40% to 50%. In terms of film materials, the operating rate of enterprises has increased to around 60% in the latter half of the year. Although there has been an increase, the overall position is not high, and the improvement of the stocking situation of terminal enterprises is limited, with procurement maintaining production as the main focus.

In terms of fiber materials, according to the Commodity Market Analysis System of Business Society, as of June 30th, the spot price of domestic fiber PP has declined. The mainstream quoted price of domestic producers and traders for Z30S (fiber) is around 7137.50 yuan/ton, with an increase or decrease of -0.17% compared to the average price at the beginning of the month, and a decrease of -17.17% compared to the same period last year. This month, the main downstream non-woven fabric enterprises of PP fiber material maintained a low horizontal load, with an overall operating rate of around 31%. The demand for fiber materials in the market is weak, and the digestion speed of non-woven fabric end products is average. Enterprises have low efforts to replenish fiber PP, resulting in narrow price fluctuations and adjustments. It is expected that in the short term, fiber materials may continue to undergo narrow adjustments due to supply-demand conflicts.

In terms of melt blown materials, the June melt blown PP market continued to be weak. As of June 30th, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of Business Society is about 7875 yuan/ton. Compared with the average price level at the beginning of the month, the price has increased or decreased by -3.67%, with a year-on-year decrease of 17.97%. At present, there is little domestic news on health events, and local social news is powerless to drive the consumption of medical meltblown fabric materials. There is also no significant boost in overseas demand, with traders giving up profits and taking orders, resulting in excessive parking of melt blown material production lines. It is expected that the melt blown material market may maintain a weak consolidation market.

Future Market Forecast

PP analysts from Business Society believe that the rise in the polypropylene market in June was hindered. The raw material propylene market has stopped falling and rebounded, with frequent fluctuations in distant crude oil, and average support from the cost side for the market. The operating rate of terminal enterprises is poor, and the demand for goods tends to maintain production, resulting in weak demand release. The small number of market orders hinders the low level recovery of the market, and it is expected that the PP market may maintain a range consolidation market early next month.