According to the data monitored by the business agency, the PP market fell in July, and the spot price of wire drawing brand fell. As of July 28, the mainstream offer price of T30S (wire drawing) from domestic manufacturers and traders was about 8225 yuan / ton, up or down -4.45% compared with the average price at the beginning of the month.

Cause analysis

Industrial chain: upstream, the domestic propylene (Shandong) market continued to decline in July, with a monthly decline of 5.81%. In the middle of the year, there was a wave of price support in the market, but the feedback from the downstream was poor, and the return of gains went down further. The market supply is sufficient, the downstream gas buying is insufficient, the cost support is weak, the contradiction between supply and demand is prominent, and only relying on the cost to support the bottom, the profitability of the overall propylene industry chain is poor, and the market price is under pressure. Long term bearish.

Propylene prices fell as a whole, crude oil fluctuated sharply under the influence of macro inflation such as the Federal Reserve’s interest rate hike, and PP cost side support weakened in July. In terms of industry load, the operating rate of PP polymerization enterprises fell after rising this month. Enterprises independently reduced the negative diversion supply pressure, and the operation was biased towards digesting inventory. This month’s inventory was at a high level over the years. In terms of demand, the downstream factories of wire drawing materials purchase and follow-up are biased towards just need to maintain production. In terms of operation, they buy on bargain hunting and have a strong resistance to high price sources. Traders’ shipments gradually yield profits, follow the market, the effect appears at the end of the month, and the spot price gradually stops falling and stabilizes. The operating rate of terminal enterprises decreased in a narrow range, and it is expected that the spot market of PP wire drawing materials may rebound in a narrow range in the short term.

In terms of fiber materials, according to the data monitored by the business society, as of July 28, the spot price of domestic fiber PP gradually fell. The mainstream offer price of domestic producers and traders Z30S (fiber) is about 8150 yuan / ton, with an increase or decrease of -5.05% compared with the average price at the beginning of the month, and a decrease of -4.31% year-on-year. In July, the load of downstream non-woven enterprises, the main force of PP fiber, decreased, and the demand and operation of end enterprises continued on the whole. Large enterprises just needed to take goods to maintain production, and the load of small and medium-sized enterprises decreased or even stopped production. The consumption of products maintains the off-season mode, and the replenishment operation tends to maintain production. The demand for medical fiber products has also cooled, and the rigid support is weakened. The supply side is abundant. At the end of the month, the buyer camp bought on bargain hunting, and trading recovered. It is expected that the fiber material may rebound in a narrow range with the wire drawing material in the short term.

In terms of melt blown materials, the melt blown PP market fell in July. As of July 28, the average quotation of domestic melt blown material sample enterprises monitored by the business agency was about 9366.67 yuan / ton, up or down -2.77% compared with the average price at the beginning of the month. In terms of international health events, the current situation in various countries is still not optimistic. Recently, the number of confirmed cases in China has increased, and the epidemic prevention pressure continues to fluctuate. However, medical meltblown cloth materials have entered the off-season of consumption, and the demand has decreased, which does not significantly support the spot price. The supply of melt blown materials in the market is sufficient, and the saturation of domestic melt blown materials and cloth enterprises is high, which together with the shipping resistance puts pressure on the spot price. At the end of the month, the market’s acceptance of the reduced price increased, and the price volatility stabilized. It is expected that the recent market of melt blown PP may pick up in a narrow range along with other PP varieties.

Aftermarket forecast

PP analysts of business agency believe that the domestic polypropylene market fell in July, the raw material propylene market fell, the decline of international crude oil intensified, and the cost side support of PP weakened. The demand of terminal enterprises expands slowly, the mentality of merchants is general, and the offer is subject to the market. At the end of the month, the price position hit the bottom and rebounded. It is expected that the recent PP market will be dominated by fundamentals and pick up in a narrow range.