November 2nd News
According to SpotCom data, since October, the PP market trend in China has been positive, with prices for various grades of products increasing significantly. As of November 2nd, the benchmark price for PP fiber was 11,650 CNY/ton, representing a 17.28% increase from early October.
Price Trend
Regarding raw materials:
On the international crude oil front, renewed tensions in the Middle East have stoked market concerns about global supply. Last month, incidents such as fires aboard vessels in the Strait of Hormuz prompted investors to swiftly price in supply-disruption risks. Geopolitical premiums on oil prices rebounded rapidly, triggering a synchronized rally across commodities. Traders proactively increased long positions in crude, while rising expectations for shipping insurance costs further amplified supply worries, bolstering higher oil prices. Meanwhile, earlier sharp declines in U.S. crude inventories provided additional support; the confluence of fundamental factors and geopolitical developments pushed oil prices above key resistance levels. As a result, propylene prices moved in tandem with crude. In particular, since mid‑last month, ex‑factory prices at petrochemical plants have surged, reaching historic highs. In China, thermal coal prices strengthened amid colder weather conditions. Overall, elevated PP cost levels have been the primary driver behind the recent rise in polypropylene prices.
Supply aspect:
Recently, Chinese PP enterprises have been largely stable with minor adjustments. The overall operating rate is close to 67%, which is relatively low. Recently, companies such as Sinochem Quanzhou and Ningbo Kingfa have announced maintenance plans. In the future, additional shutdowns are expected from companies like Donghua Energy and Shanghai Petrochemical, leading to a slight increase in capacity losses. The current weekly average production is less than 700,000 tons, and the social inventory has decreased to 560,000 tons, which is at a low level. Overall, the slow return of capacity, along with the expectation of reduced supply and low inventory, provides some support for spot prices.
Demand side:
In early November, polypropylene consumption is still benefiting from the tail end of the traditional peak consumption season known as "Golden September and Silver October." At the same time, e-commerce shopping festivals are driving the purchase and sale of appliances and packaging, with downstream markets gradually following. However, due to the high spot price of PP, buyers' profit margins have been squeezed, leading to a low acceptance of high-priced supplies, and overall trading sentiment remains cautious. End-user companies are adopting a strategy of buying as needed, with most orders being small and sporadic. The enthusiasm for building inventory within the market is moderate, and inventories are generally low. For small and medium-sized enterprises, operating rates have improved slightly, with downstream loads increasing marginally to around 44%. Overall, demand from the downstream sector provides only moderate support for PP.
Future Market Prediction
In early November, the PP market prices in China continued to rise. From a fundamental perspective, the cost side remains high with further increases, while demand is characterized by rigid orders and cautious downstream operations. PP analysts believe that current PP demand is being suppressed by high prices, leading to limited release, and there is an expectation of a slight contraction in supply. However, with multiple products in the upstream supply chain seeing price increases, it is expected that the PP market may continue to show a strong trend in the short term.
