September 24th report:
According to Spotcom data, entering late September, China's PP market has been consolidating at high levels, with prices for various grades of products showing mixed increases and decreases. As of September 24, the benchmark price for PP fiber was reported at 9,883.33 CNY/ton, representing a 3.56% increase from the beginning of the month.
Price Trend
Regarding raw materials:
In the first half of September, the situation in the Middle East was turbulent, and the ceasefire agreement was difficult to implement, driving up international crude oil prices. Recently, the Iranian president traveled to the United States to attend a meeting, and U.S. President Trump publicly stated his willingness to meet with the Iranian president. At the same time, Iran has conveyed clear conditions for restarting negotiations to the mediator, marking a substantial diplomatic breakthrough in the ongoing U.S.-Iran confrontation. The market's trading focus shifted from "panic over supply disruptions" to "situation cooling and supply recovery." The risk of shipping in the Strait of Hormuz decreased, and the market's concern over international crude oil supply eased, leading to a reduction in geopolitical premium and a sharp decline in the high-end cost of PP. Meanwhile, propylene prices also fell significantly. Overall, support for PP from the raw material end weakened in late September.
Supply side:
As we entered late September, Chinese PP producers alternated between maintenance shutdowns and restarts, with overall operating rates hovering near 70%, showing little change compared to the previous period. Recently, companies such as Datang Duolun and Lianhong Xinke have increased their production loads, while Ningbo Fude and Ningbo Jinfafa have undertaken partial plant maintenance, leaving limited room for supply-side adjustments going forward. Current weekly output remains around 700,000 tons, and inventory levels are close to 500,000 tons—relatively low. Overall, the gradual recovery in supply and subdued inventory levels continue to provide some support to the spot market, with the supply side offering moderate backing to spot prices.
Demand aspect:
Currently, polypropylene consumption is in the traditional peak season. Since the beginning of the month, demand has gradually moved out of the off-season levels, with the downstream market slowly following. However, due to the counter-seasonal trend in the cost end and the fact that the PP spot price has already risen to a high level, buyers are not very receptive to high-priced goods, and the overall trading atmosphere is cautious. End-user companies prefer to purchase as needed, with orders mostly being small and scattered, leading to low enthusiasm for building inventory, and inventories are generally at low levels. For small and medium-sized enterprises, the operating rate has slightly improved, with the downstream load approaching 47%, but overall, demand provides only moderate support to PP.
Future Market Forecast
In late September, China's PP market prices were at a high level and consolidating. From a fundamental perspective, the cost side saw a decline from a high position, while demand-side orders had previously seen a moderate increase. Recently, pre-holiday stockpiling has largely concluded, and downstream operations have returned to a cautious stance. PP analysts believe that currently, the PP market is experiencing weak supply and demand, coupled with the drag of cost value retracement. This suggests there may still be downward pressure in the future. It is recommended to pay attention to the industry commissioning situation in October and the situation in the Middle East, particularly between the U.S. and Iran.
