PP Market: Mixed Trends Today

Domestic petrochemical inventory: The inventory of polyolefins of two oils is 765,000 tons, down 25,000 tons from yesterday.

Futures analysis: On July 23, PP2509 opened at 7150, the highest price was 7170, the lowest price was 7073, the position was 356155, the settlement price was 7126, yesterday's settlement was 7168, the decline was 42, the daily trading volume was 338236 lots, the deposited funds were 1.769 billion, and the capital outflow was 152 million.

Market drawing mainstream quotation:

Domestic spot market analysis: Today, the overall domestic PP market has a considerable rise, showing a positive trend of steady upward movement. The market prices in North China, East China, South China, Southwest China and Northwest China all showed an upward trend, and the increase in each region was different.

The market price increase in East China was relatively large, while the market price increase in Northwest China was relatively limited. Under the positive influence of macroeconomic policies, the polypropylene futures market showed a fluctuating upward trend, and market confidence was effectively boosted. 

Driven by this, most PP manufacturers have raised their ex-factory prices, with price adjustments ranging from 10 to 100 yuan/ton. Some other companies have chosen to maintain the current price stability to observe subsequent market changes. Although downstream factories are still mainly purchasing to meet their own production needs, and there has not been large-scale inventory replenishment, traders are optimistic about market expectations and are actively shipping to seize market share and accelerate the pace of spot circulation.

Overall, with the joint effect of policy support, market pull and traders' active adjustment of shipping strategies, the trading atmosphere in the PP market continues to improve, and the enthusiasm of buyers and sellers continues to rise, laying the foundation for further stable price increases.

Analysis of domestic futures market: The night trading price of PP2509 contract showed a narrow range of fluctuations; after the opening of the morning session, the price first showed a slight upward trend, and the price climbed to the highest level of the day, and then the price quickly fell back, and the market turned from a high to a fluctuating downward trend; the price continued to decline in the afternoon, and although it rebounded slightly in the late trading, it still showed a downward trend under pressure.

The PP2509 contract fluctuated throughout the day in the range of 7073-7170, with a spread of 97, and the 09 contract reduced its position by 26,651 lots. As of now, the position is 356,155 lots.

Forecast for the future market: In the crude oil market, the positive factors mainly come from the fact that the US sanctions policy on oil-producing countries has not been relaxed and continues to play a role; the negative factors are diversified. Although the geopolitical tension has eased, there are still variables. OPEC+ maintains production increases, increasing supply-side pressure, coupled with the weak global economy, suppressing market demand. On the supply side, the increase in on-site trading activity directly pushed the two oil polyolefin inventories down again.

In addition, some units are still under maintenance and shutdown, and the overall supply side is shrinking. Although the downstream is in the traditional off-season and the demand base is weak, the positive macroeconomic policies continue to be released, pushing the market price center of gravity upward, the mentality in the market gradually improves, and the trading atmosphere warms up, which to a certain extent offsets the constraints of off-season demand.

However, the upward process still faces the pressure caused by insufficient demand follow-up. On the whole, it is expected that the polypropylene market price will have upward momentum in the short term, but due to insufficient demand follow-up and the weak downward trend of the futures market, the market price increase is relatively limited.

Domestic PP Index: According to Tu Duoduo data, the domestic PP spot index was 7104.00 on July 23, up 27, a range of 0.38%.

Guoneng auction statistics: Guoneng Coal Chemical's auction volume today was 2,341 tons, down 1.43% from yesterday; the transaction volume was 1,886 tons, up 25.73% from yesterday; the transaction rate was 80.56%, up 17.41% from yesterday.

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