Adequate Supply, PP Market Weak in Mid-November in China

November 20, news

According to the commodity market analysis system, in mid-November, the PP market in China experienced fluctuating declines, with more price drops than increases for various product grades. As of November 20th, the benchmark price for PP fiber was 6,446.67 CNY/ton, a change rate of -4.11% compared to the beginning of November.

Price Trend

Regarding raw materials:

This decade, the crude oil market has been influenced by both bullish and bearish factors. On one hand, the new round of production increases by OPEC+ oil-producing countries has led to continued concerns about long-term supply surplus risks; on the other hand, geopolitical factors have reduced Russian supplies, and the easing of U.S. tariff issues has provided positive news for the international crude oil market. Within this period, the tug-of-war between bulls and bears has resulted in fluctuating oil prices. In terms of propylene, the previous inventory has been digested, and recent supply has tightened, allowing companies to sell without pressure and control the volume of shipments. As a result, the spot price of propylene continues to rise. For propane, the external market remains strong, with port goods leading the price increase. Overall, the raw material market for PP provides adequate cost support.

Supply side:

In mid-November, Chinese PP companies experienced both restarts and maintenance. As of the time of writing, the overall industry load level in China is around 79%, with little difference from the previous decade. The current weekly total production is above 800,000 tons, and the inventory level is hovering around 900,000 tons. Earlier in the period, some production lines at Daxie Petrochemical and Guangxi Petrochemical were unexpectedly shut down. Meanwhile, Zhenhai Refining & Chemical's Line 3, Jibobo Petrochemical's Line 2, and Luoyang Petrochemical's Line 2 were restarted, with the lost capacity largely offset. The supply within the market remains ample. Overall, the supply side's support for the spot price has remained stable.

On the demand side:

The outcome of the recent China-U.S. talks at the beginning of the month fell short of market expectations, offering limited boost to industry sentiment. Coupled with global macroeconomic sluggishness, external markets are being weighed down by the Federal Reserve’s interest rate cuts and rising trade protectionism—both of which are dragging down the export performance of finished products, thereby constraining downstream businesses. Although mid-November saw a continuation of the previously subdued buying activity, the immediate, essential purchasing needs from end-user factories have helped stabilize prices at the bottom. However, overall, given the industry’s already high supply levels, this underlying demand momentum remains insufficient to provide meaningful support for PP spot prices. Meanwhile, the consumer-driven sales surge during the Double 11 e-commerce festival had only a marginal impact on improving market trading conditions, as numerous negative factors continued to overshadow any potential upside. As a result, demand-side support remains weak and steady.

Future Market Forecast

In mid-November, the PP market prices in China fluctuated and declined. From a fundamental perspective, the upstream raw material prices showed mixed trends, providing moderate support to PP overall. Improvements in consumption were limited, with industry operating rates remaining high and stable. With a large production capacity base, the supply remains loose, and there is a lack of momentum for further inventory digestion. It is expected that the PP market may enter a phase of stalemate and adjustment.