Cost warming, PP market strengthening

According to the commodity market analysis system of Shengyishe, the PP market has been rising recently, and prices of various wire drawing brands have mostly increased. As of March 22nd, the mainstream quoted price for T30S (wire drawing) by domestic producers and traders is around 7771.43 yuan/ton, up or down+0.83% from the beginning of the month.


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Cause analysis


Industry chain: In terms of PP raw materials, there have been positive trends in the international crude oil market recently, which has supported the recovery of the cost side of oil based PP. Crude oil drives downstream propylene to fluctuate and rise, while propane generally stabilizes, providing strong support for propylene production and PDH. The methanol market is also relatively stable, but due to weak demand, market prices have quietly dropped, which has loosened support for PP. The overall support for PP from upstream raw materials is still acceptable.


Overall, the raw materials have remained stable with some growth, and there is still support for the PP cost side. The industry load fluctuated narrowly, with an average load of around 76% this week. There are some production line maintenance plans for next week, and at the same time, the new production capacity in March has not been fully implemented, and the market supply has not reached the expected level. At the same time, the overall inventory position has declined, and there is no significant supply pressure in the market. In terms of demand, the load of terminal enterprises is basically horizontal, and the comprehensive operating rates of downstream PP enterprises such as plastic weaving, film materials, and injection molding are about 40%, 64%, and 56%, respectively, with no significant improvement. The replenishment operation of enterprises is average, and the trading atmosphere on the market is not strong. The overall market for wire drawing materials is affected by the expected positive effects of cost and supply tightening, and the market is warming up.


In terms of fiber materials, according to the commodity market analysis system of Business Society, as of March 22, the spot price of domestic fiber PP has also increased. The mainstream quoted price for domestic producers and traders of Z30S (fiber) is around 7637 yuan/ton, with an increase or decrease of 1.66% compared to the average price at the beginning of the month, and a decrease of 1.36% compared to the same period last year. Recently, the main downstream non-woven fabric enterprises of PP fiber materials have seen an increase in low load, with a relatively high operating rate of 26%. The load on end enterprises has increased, and the market non-woven fabric contracts have risen narrowly. The digestion speed of end products has not improved, and the main support for fiber material prices comes from the cost side. It is expected that the fiber material market will continue to consolidate.


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In terms of melt blown materials, the melt blown PP market has recovered this week. As of March 22, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of Shengyishe is about 7987 yuan/ton. Compared with the average price level at the beginning of the month, the price has increased or decreased by -0.16%, with a year-on-year decrease of 8.19%. At present, the demand for facial protection in China is generally high, and the consumption of medical melt blown fabric materials is not significantly driven. There is also no significant boost in domestic and foreign demand. In addition, downstream factories have a low load, resulting in new orders leaning towards loose orders. It is expected that the melt blown material market will continue to be weak and stable.


Future Market Forecast

PP analysts from Business Society believe that the polypropylene market has strengthened recently. The overall trend of upstream raw materials is stable with some increases, and the support from the cost side for the market is still acceptable. There is an expectation of tightening PP supply next week, and there is a positive outlook on the supply side. But terminal enterprises operate steadily, stock up is necessary to maintain production, and on-site trading is average. It is expected that the PP market will remain strong in the short term.

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