Pyrvinium pamoate

PP Recent Commodity Market Dynamics, Analysis, and Forecast

I. Market Dynamics
(A) Price Trends
1. Spot Prices
- On July 6, 2026, the Business Society’s benchmark price for PP (raffia grade) stood at RMB 8,166.67 per ton, and for PP (fiber grade) at RMB 8,275.00 per ton.
- PP spot prices fluctuated during July 1–6, 2026. The market basis (spot price minus futures price) reported by the Business Society was RMB 744/ton on July 1, RMB 946.33/ton on July 2, RMB 808.33/ton on July 3, and RMB 893.67/ton on July 6.
2. Futures Prices
- From July 2 to July 7, 2026, polypropylene (PP) futures prices exhibited a range-bound, volatile pattern. News reports dated July 2 indicated notably weakening cost support, pointing to continued price consolidation; whereas data from July 1 highlighted increased supply coupled with weak demand, suggesting a generally bearish short-term trend for PP.

(B) Supply Conditions
1. Plant Operating Rates and Output
- In early July 2025, domestic PP plant operating rates were reduced, declining from approximately 80% at the end of last month to around 77%. Weekly average national output consequently fell to 770,000 tons. However, inventory digestion remained sluggish, pushing total domestic inventories up to nearly 800,000 tons.
2. Plant Operations Updates
- In July 2025, Yanchang Zhongmei suspended operations on July 1 for a 45-day maintenance period. Additional planned load reductions are expected at Jibao and Dalian Petrochemical, partially alleviating near-term supply pressure. Nevertheless, newly commissioned capacities—including Zhenhai Phase IV and Yulong Phase IV—as well as further capacity additions scheduled for Q4 (e.g., Yulong Petrochemical), collectively totaling 1.4 million tons, will significantly constrain the longer-term supply-demand balance.

(C) Demand Conditions
1. Domestic Demand
- In early July 2025, domestic PP demand remained lackluster, consistent with the onset of the traditional off-season. Traders showed no signs of advance procurement; purchasing activity remained strictly demand-driven and just-in-time. In the plastic woven packaging sector, end-user consumption has already settled at off-season levels. Downstream PP processors reported low operating rates, with construction- and agriculture-related applications likewise flat at low levels. New orders were predominantly small, sporadic transactions or contractual deliveries only, resulting in subdued liquidity and sluggish demand release.
2. Export Demand
- Amid simultaneous weakness in both export and domestic demand, PP demand provided negligible upward support to spot prices.

(D) Cost Factors
1. Crude Oil
- In early July 2025, easing Middle East geopolitical tensions reduced market concerns over potential crude supply disruptions. Additionally, the OPEC+ production increase agreement came into effect, exerting downward pressure on international oil prices.
2. Propane and Propylene
- Domestically, propane prices followed crude oil lower from elevated levels, diminishing cost support for PDH (propane dehydrogenation) producers. Propylene prices also entered a rapid downward phase. Overall, upstream raw material cost support for PP weakened significantly.

II. Analysis and Assessment
(A) Supply-Demand Balance
The current PP market faces pronounced supply-demand imbalances. Although operating rates have been lowered, inventory digestion remains inefficient, and substantial new capacity additions loom on the horizon—exacerbating supply-side pressure. On the demand side, the industry is entrenched in its traditional off-season: downstream processing plants operate at depressed rates, demand recovery remains gradual, and both export and domestic demand remain weak—offering limited price support.

(B) Cost Support
Falling prices for upstream feedstocks—crude oil, propane, and propylene—have eroded cost-based support for PP. This downward cost pressure further compresses profit margins and exerts additional downward pressure on PP pricing.

(C) Market Sentiment
Amid the confluence of supply-demand imbalance and weakening cost support, market participants hold a generally bearish outlook. Traders maintain strictly just-in-time procurement strategies, exhibiting little enthusiasm for forward buying; overall trading sentiment remains muted and inactive.

III. Outlook
(A) Short-Term Outlook
In the near term, PP prices are likely to continue trending weakly. Although some production cuts and planned shutdowns provide modest relief, high inventory levels and looming new-capacity additions cap upside potential. Meanwhile, demand remains constrained by seasonal weakness and offers minimal price support. Downward pressure from falling upstream feedstock costs compounds these headwinds. Collectively, persistent supply-demand imbalances and weakening cost support point toward continued softness in PP pricing.

(B) Medium- to Long-Term Outlook
Looking ahead, downstream demand may gradually recover following the conclusion of the traditional off-season. However, the impending influx of ~1.4 million tons of new capacity poses a significant supply overhang. Should demand growth fail to absorb this incremental supply, the PP market risks substantial oversupply, potentially driving prices lower. That said, a sharp rebound in international oil prices—or supportive government policies stimulating demand—could provide meaningful price support.