Downstream Stockpiling Intentions Low at Year-End; PP Market Remains Relatively Weak

December 22nd, according to reports

According to the commodity market analysis system, as the end of 2025 approaches, the PP market in China has maintained a weak consolidation, with more price declines than increases for various grades of products. As of December 22, the benchmark price for PP fiber was reported at 6,253.33 CNY/ton, representing a year-over-year change rate of -2.39%.

Price Trend

Regarding raw materials:

In the earlier period, OPEC+’s new round of production increases intensified industry concerns about an oversupply of crude oil. Recently, driven by low price levels and the approaching holiday season—which typically boosts seasonal demand—international oil prices have staged a rebound from their recent lows. As for propylene, inventories had been at historically low levels, leading to tighter supply and pushing spot prices to elevated levels. By mid-month, spot prices had reached a temporary peak; however, as positive factors gradually fade, spot prices have begun to ease somewhat. On the propane front, overseas prices remain high, and port prices are also firm, resulting in overall stable pricing. Overall, the prices of PP’s various raw materials have shown mixed trends, but the support for PP costs remains reasonably solid.

Supply side:

Entering the second half of December, the restarts and maintenance of PP enterprises in China are roughly balanced, with little change in the overall operating rate. As of the time of writing, the overall load level of the industry in China is around 79%, with a negligible difference from the beginning of the month. The current weekly total production is close to 820,000 tons, with inventory at around 800,000 tons, and the supply within the market remains ample. However, there are multiple maintenance plans scheduled for the future, leading to an expectation of a slight decrease in production. Overall, the support from the supply side for the spot price is moderate.

Demand side:

China's economic work conferences and other meetings have released neutral information, with results falling short of market expectations, providing limited boost to business sentiment. E-commerce has somewhat stimulated consumption in packaging and home appliances, but the overall trading atmosphere in the industry market has not significantly improved. At the same time, the effects of the Federal Reserve's interest rate cuts and trade protectionism are still present, dragging down the export of end products, and downstream enterprises are operating at less than ideal capacity. Currently, the finished product market for PP end-users is lukewarm, with slow raw material digestion. As the year-end approaches, end-users are showing low willingness to build inventory, and midstream operators are increasing their efforts to reduce inventory by offering discounts. Demand momentum is insufficient to support the spot price of PP.

Future Market Forecast

Entering late December, the PP market prices in China remain weak and fluctuating. From a fundamental perspective, the upstream raw material prices have seen more increases than decreases, providing moderate support to PP. The industry's operating rates remain high and stable, but there is limited improvement in consumption. With a large base of production capacity, the supply remains ample, and there is a lack of momentum for further inventory digestion. It is expected that the PP market will continue to experience an adjustment phase.