China PP Inventory Increased

1. China’s Total PP Inventory Analysis

According to SCI, China’s PP inventory on Jun 22 increased by 5.02% from Jun 15. Therein, the PP inventory at major producers slid, while that at ports and trade companies headed down.

2. China’s PP Inventory at Petrochemical Companies Analysis

According to statistics, the PP inventory at major producers on Jun 22 increased by 6.20% W-O-W. Impacted by the Dragon Boat Festival holiday, PP producers sold resources slowly, so the inventory mounted up. On the supply side, the loss volume of PP output caused by the turnarounds was about 88.9kt, up 4.22% W-O-W. During the week ended Jun 22, Pucheng Clean Energy Chemical shut down the unit for temporary maintenance. Besides, PetroChina Sichuan Petrochemical, the second line at Fujian Refining and Petrochemical and the third line at Sinopec Beijing Yanshan Company restarted their units.

3. China’s PP Inventory at Ports Analysis

The PP inventory at ports on Jun 22 increased by 8.49% W-O-W. In the week ended Jun 22, the homo PP import volume remained unchanged from last week. The foreign traders gave sparse quotations, and their quotations were still high, leading to a cautious stance. Under limited deals in the PP import market, the PP inventory at ports rose from last week.

4. China’s PP Inventory at Trade Companies Analysis

The PP inventory at trade companies on Jun 22 decreased by 1.60% W-O-W. The sample trade companies sold resources actively, while they showed weak appetites in stocking up. Thus, the inventory at trade companies declined.

5. Summary

The PP futures went public on February 28, 2014, since then, the financial property of the spot products became stronger. The quantifiable data about supply-demand fundamentals played a more important role in judging PP market trend. The data of production and import were transparent and hysteretic, hence, the data were hard to become the main factor to forecast the market trend. Concerning raw materials inventory, it was difficult to collect its data, let alone collect it timely. Thus, the inventory data became an irreplaceable and prominent factor to analyze the future market situation.

As the previously-stopped units resume production successively, the supply of PP is supposed to rise. A few downstream enterprises suffer negative profits, so their inventory of finished products is high. Then these enterprises are reluctant to purchase. It is predicted that imbalance between supply and demand will worsen, so PP prices will probably head down.