According to the commodity market analysis system of Business Society, the PP market has been experiencing strong fluctuations recently, with prices of various wire drawing brands generally increasing. As of May 30th, the mainstream quoted price for T30S (wire drawing) by domestic producers and traders is around 7964.29 yuan/ton, a+1.55% increase or decrease from the price level on May 1st.

Cause analysis

Industry chain: In terms of PP raw materials, international crude oil prices weakened at the beginning of the month due to the downward trend. Subsequently, due to the expectation of OPEC+production reduction and the influence of international geopolitical factors, the market rose, providing support for the PP market to rebound. In the second half of the month, domestic port inventories of propane decreased and prices increased. At the same time, the price of propylene increased significantly in May, and overall, the cost support for PP was relatively strong during the month.

Overall, the raw material market is active and provides strong support for the PP cost side. In terms of industry load, there has been a slight decline. Due to maintenance by enterprises such as Zhenhai Refining and Chemical and Ningbo Jinfa, the average load at the end of the month has decreased slightly to around 72% compared to before. The inventory position of the production enterprise is still acceptable, and the supply pressure is average. However, there may be a partial return to production capacity in the later stage, which may cause a certain degree of supply increase. The strong macro expectations in the real estate and other industries in the second half of the month are the main driving force for the upward trend of PP. However, the load on end enterprises has generally remained stable, with downstream PP enterprises such as plastic weaving, film materials, and injection molding having a comprehensive operating rate of about 42%, 65%, and 57% at the end of the month, respectively. The demand is limited, and enterprise replenishment operations are mainly based on basic needs, resulting in a moderate trading atmosphere.

In terms of fiber materials, according to the commodity market analysis system of Business Society, as of May 30th, the spot price of domestic fiber PP has fluctuated and increased. The mainstream quoted price for domestic producers and traders of Z30S (fiber) is around 7775 yuan/ton, with an increase or decrease of+0.65% compared to the average price at the beginning of the month, and an increase of 8.36% compared to the same period last year. Within the month, the main downstream non-woven fabric enterprises for PP fiber materials have a stable load, with an average operating rate of around 29%. The trading volume in the non-woven fabric market is average, and orders are mainly based on contracts. The digestion speed of end products has slowed down, and the upward trend is mainly driven by macro expectations. It is expected that the future market of fiber materials may still be constrained by weak demand and weak operation.

In terms of melt blown materials, the melt blown PP market has remained stable with an increase this week. As of May 30th, the average quotation of domestic melt blown material sample enterprises monitored by the Commodity Market Analysis System of Shengyishe is about 8075 yuan/ton. Compared with the average price level at the beginning of the month, the increase and decrease is+0.47%, with a year-on-year decrease of 1.22%. At present, the demand for facial protection in China is generally high, and the consumption of medical melt blown fabric materials is not significantly driven. In addition, the downstream factories have low load, and most of the new orders are scattered. It is expected that the digestion speed of terminal products in the future market will be slow, and melt blown materials may weaken due to the drag of demand.

Future Market Forecast

PP analysts from Business Society believe that the overall polypropylene market in May was strong and volatile. The overall trend of upstream raw materials is positive, and the cost side provides strong support for the market. There has been a narrow decline in the supply of goods, but there are expectations of an increase in the future. Currently, the supply pressure is not significant. The production of terminal enterprises is stable, and stocking is essential to maintain production. The current strong macro weak reality on the market is expected to gradually enter the off-season market in the future, The PP market may stagnate and weaken.