Downstream Consumption Is Acceptable, PP Market is Strong in a Narrow Range

According to the monitoring data, the PP market in early September rose within a narrow range, and the spot prices of various drawing grades rose more and fell less. As of September 5, the mainstream offer price of T30S (drawing) from domestic manufacturers and traders was around 8083.33 CNY/ton, a change of +0.83% compared with the average price at the beginning of last week.

Cause Analysis

Industry chain: Upstream, the propylene market was sideways this week. The center of gravity of spot prices continued to move downward last month, and the strength of periodic rebound was insufficient. The current supply pressure is acceptable, but the demand in the field is generally supported, and centralized stocking operations have not yet occurred. For the next traditional peak season, the improvement of the mentality of the industry is limited. It is expected that the rising resistance of propylene will remain, and the market may continue to organize and run.

The price of propylene was generally flat, and the PP cost side was generally supported last week. In terms of industry load, the recent changes in the operating rate of PP polymerization enterprises are limited, and the proportion of wire drawing material allocation is not high. Inventories fell in a narrow range last week, and the supply pressure was acceptable. The downstream demand has risen slightly, and some terminal factories have ended power and production restrictions, but most of the stocking is scattered and small orders. The mentality of traders is general, and the offer will follow the market. It is expected that in the short term, the spot market of PP wire drawing materials will be mainly sorted out.

In terms of fiber materials, according to monitoring data, as of September 5, the spot price of domestic fiber PP was running weakly. The mainstream offer price of Z30S (fiber) from domestic manufacturers and traders is around 8,050 CNY/ton. Compared with the average price at the beginning of last week, the increase or decrease is +0.84%, and the decrease of -5.11% compared with the same period last year. This week, the load of the main downstream non-woven fabric enterprises of PP fiber materials was stable as a whole, and the changes in the demand and start-up situation of terminal enterprises were limited. The digestion speed of non-woven fabrics for downstream products is average, and companies reduce prices to ship, and the replenishment operation of fiber PP tends to go with zero orders. Due to the lack of confidence in the market's macroeconomic structure and the heavy wait-and-see mood in the industry chain, it is expected that the fiber material market may have limited growth in the short term.

In terms of melt-blown materials, the melt-blown PP market was sideways this week. As of September 5, the average quotation of domestic melt-blown material sample companies monitored was about 9166.67 CNY/ton. Compared with the average price at the beginning of last week, the increase and decrease were flat. A year-on-year decrease of -0.36%. In terms of international health events, the current situation in various countries is still not optimistic, and neighboring Japan has recently developed explosively. There is a rebound in some areas of my country, but the overall epidemic prevention pressure is not strong. Medical meltblown cloth materials are in the off-season of consumption, and the demand at home and abroad has not significantly helped, and the spot price is not well supported. The inventory of meltblown materials in the market is sufficient, and the saturation of domestic meltblown materials and cloth enterprises is relatively high. It is expected that the recent market of meltblown PP will still run weakly.

market outlook

PP analysts believe that the polypropylene market rose in a narrow range last week, the raw material propylene market was sideways, and the PP cost side was generally supported. The demand of terminal enterprises is slowly picking up, and merchants offer to follow the market. Judging from the survey results and market reaction, the industry is affected by the economic environment and lacks confidence in whether the demand in the traditional peak season will be sufficient as expected. It is expected that the PP market may be hindered in the short term.