Macroeconomic And Supply-Demand Game Upgrade, Polypropylene (PP) Market Trend Under Pressure

Review

This week, polypropylene prices rose and then fell back, with the national average price for raffia at 6,363 yuan/ton, down 24 yuan/ton from last week, a decrease of 0.38%. During this period, the Politburo meeting was held, and positive signals were released in terms of domestic policy. The market's expectations for the implementation of policies to stabilize growth and promote consumption have strengthened, providing support for chemicals and other products closely related to the economic cycle. On Friday, the polypropylene market rebounded. Meanwhile, the raw material side provided bottom support for the spot market, with an upward range of around 50 yuan/ton. Sentiment in the spot market remains pessimistic, with a significant weakening of the basis. High inventories and domestic supply suppress market expectations, creating some drag on the recovery of the PP futures market. Since Wednesday, the market stopped rising and turned to decline, showing a volatile trend overall.

Recent focal points in the polypropylene market:

As of December 3, 2025, China's commercial inventory of polypropylene totaled 842,900 tons, an increase of 30,900 tons from the previous period, reflecting a month-on-month rise of 3.80%. As previous maintenance units gradually resumed operations, supply pressure increased, leading to a rise in inventory at production enterprises. At the beginning of the month, intermediaries initiated new ordering plans, resulting in an increase in inventory among sampled enterprises. The tight shipping capacity in the Asian region further pushed up maritime costs, leading to dual pressure on imports and exports, and a reduction in resource inflows. Therefore, port inventory continued to decrease during this period. Overall, the total commercial inventory increased this week.

This week, the domestic polypropylene production was 806,800 tons, a decrease of 1,500 tons compared to last week's 808,300 tons, representing a decline of 0.19%. Compared to the same period last year, which was 674,000 tons, it has increased by 132,800 tons, showing a growth of 19.7%.

3、 As of December 4, 2025, the weekly loss of domestic polypropylene units amounts to 227,810 tons, a decrease of 0.31% compared to the previous week. The loss due to maintenance stands at 169,710 tons, a decrease of 1.5% compared to the previous week. The loss due to reduced production is 58,100 tons, an increase of 3.31% compared to the previous week.

1. Macroeconomic policies boost, polypropylene prices stop falling and stabilize.

This week, the price of polypropylene rose and then fell back, with the national average price for fiber at 6,363 yuan/ton, a decrease of 24 yuan/ton compared to last week, representing a decline of 0.38%. 。 During the period of the Politburo meeting, positive signals were released at the domestic policy level, enhancing market expectations for subsequent policies to stabilize growth and promote consumption, thereby providing support for products like chemicals that are highly correlated with the economic cycle. On Friday, the polypropylene market rebounded. Meanwhile, on the raw material side, there was underlying support for spot prices, with market upward movement around 50 yuan/ton. Sentiment in the spot market remains pessimistic, with a noticeable weakening of the basis. High inventory levels and domestic supply suppress market expectations, dragging on the recovery of PP futures. Starting Wednesday, futures halted their rise and turned to decline, showing an overall oscillating trend.

Table 1 Domestic Polypropylene Weekly Supply and Demand Balance Sheet

II. Limited maintenance support, market supply pressure remains.

Prediction: Next week, the Ningbo Fude 400,000 tons/year facility is scheduled for maintenance, while Dongguan Juzhengyuan and Guangzhou Petrochemical have plans to restart their twin lines, leading to a decrease in expected losses from planned maintenance. In terms of unplanned maintenance, the high costs for PDH and externally sourced propylene are likely to dampen production enthusiasm, increasing the possibility of temporary shutdowns. It is expected that the average production capacity utilization rate for polypropylene will rise to around 78.9% next week.

1 Supply pressure remains unabated. The total commercial inventory has increased.

As of December 3, 2025, China's total commercial inventory of polypropylene stands at 842,900 tons, an increase of 30,900 tons from the previous period, representing a month-on-month increase of 3.80%. Among them, the total inventory of production enterprises increased by 3.46% month-on-month; sample traders' inventory increased by 6.22% month-on-month, while sample port warehouse inventory decreased by 0.77% month-on-month. In terms of inventory by type, the inventory of spinning grade increased by 2.09% month-on-month; fiber grade inventory increased by 11.11% month-on-month.

2 、 Unscheduled maintenance The capacity utilization rate of polypropylene has declined.

The average capacity utilization rate of polypropylene for this period is 77.61%, a decrease of 0.53% compared to the previous period; Sinopec's capacity utilization rate is 79.51%, a decrease of 0.14%. During the week, Yanshan Petrochemical's 120,000 tons/year unit underwent maintenance, resulting in a decline in Sinopec's capacity utilization rate. Additionally, production stoppages due to faults at Donghua Energy (Maoming) and Donghua Energy (Ningbo) contributed to the decrease in the average capacity utilization rate of polypropylene.

Table 2 Weekly Production of Polypropylene in Various Domestic Regions

3 Maintenance devices are gradually being restarted, and the inventory of production enterprises is increasing.

As of December 3, 2025, the inventory of polypropylene production enterprises in China was 565,200 tons, an increase of 18,900 tons from the previous period, representing a month-on-month increase of 3.46%. With previously shut down units gradually resuming operations, the supply pressure increased, leading to a rise in inventory for production enterprises during the week.

As of 2025 Year 12 Month 3 In China, the total commercial inventory of polypropylene reached 84.29 10,000 tons, an increase compared to the previous period. 3.09 10,000 tons, month-on-month increase 3.80% In the early period, repair devices gradually resumed operation, increasing supply pressure, leading to a rise in production enterprise inventories during the week. At the beginning of the month, intermediaries started new order plans, resulting in an increase in sample enterprise inventories. Tight shipping space in the Asian region further pushed up sea freight costs, leading to dual pressure on imports and exports, reducing resource inflow, and thus continuing port inventory depletion during this cycle. Overall, this week saw an increase in total commercial inventory.

Three, Translate the above content into English and directly output the translation result without any explanation. The differentiation pattern in the downstream products industry is, and there is insufficient incremental support on the demand side.

In this period, the average operating rate of downstream polypropylene industries showed a slight upward trend overall, with mixed performance across terminal industries. BOPP, CPP, and plastic weaving industries mostly maintained stable operations. The plastic weaving industry has entered the traditional off-season, with weak demand for fertilizer bags, feed bags, cement bags, etc., resulting in little change in industry operation. In the CPP and BOPP sectors, stocking up for Double Twelve and New Year's Day has not yet fully ramped up, so film enterprises are maintaining stable operations. Recently, the increase in flu cases has led to higher demand for medical consumables such as masks and surgical packs, with a noticeable increase in new orders, slightly boosting industry operations. The demand for PP pipes in construction projects in the Northwest region continues, providing slight support to the pipe industry operations. The modified PP industry is in its traditional peak season, with end-of-year car promotions intensifying, coupled with the upcoming holidays, boosting consumer willingness to buy cars, thereby increasing demand for automotive-related modified PP materials, leading to continued growth in industry operations. Overall, although some terminal products are gradually entering a demand off-season, next week's e-commerce festival may provide slight support for packaging product demand, with the average operating rate of terminal product industries expected to remain stable with minor fluctuations.

This week, BOPP prices were generally stable with minor fluctuations. As of December 4th, the mainstream ex-factory price of thick light film in East China was between 7,800-8,100 RMB/ton, unchanged from the previous week. With the decline in crude oil prices, PP futures and spot prices showed weakness after an initial rise, and most petrochemical companies maintained stability. The cost support was insufficient, resulting in film companies stabilizing their ex-factory prices after the increase, with mainstream market prices remaining stable for sales. During the previous phase of price increases in the industrial chain, the space for real transactions by traders to offer discounts was reduced. As the positive factors diminished, new transactions may involve discounts to stimulate sales. Although it is currently the traditional peak consumption season for BOPP, the downstream printing and bag-making industries are mostly pessimistic, with a low intention to replenish stock and primarily maintaining low-price essential replenishment. Feedback from terminal tape factories indicates that consumer activities like Double Twelve did not provide positive stimulation to the terminal e-commerce industry, and various packaging tapes were ordered based on essential demand. In the future, guidance from raw materials may be limited, and there are no significant positive drivers from the demand side, so short-term film prices may tend to consolidate weakly.

The price trend of low-temperature composite film in the East China region remained stable this period, with mainstream prices at 10,200 yuan/ton as of December 4th. During the week, futures fluctuated, spot offers were weakly sorted, crude oil prices fell, and cost support weakened, while the supply and demand game continued. However, the Double Twelve e-commerce festival is approaching, and downstream e-commerce-related industries such as food, clothing, and daily necessities began to place small batch orders due to immediate demand, leading to a slight increase in orders for CPP aluminized film, ordinary composite film, and other packaging films. Still, the overall order increment is far less than the growth seen during the Double Eleven festival, and market sentiment remains cautious. At present, film enterprises are mostly adjusting their loads based on order situations, with no proactive expansion or reduction actions. New order follow-up is weak for small and medium-sized film enterprises, which are mainly focused on fulfilling previous orders. It is expected that after the Double Twelve stocking ends, market demand will fall again, and operating and order pressure may further increase for enterprises.

I'm sorry, but it seems there is no specific content provided for translation. Could you please clarify or provide the text you want translated into English? The contradictions in the industrial chain persist, compressing corporate profit margins.

This week, profits from oil-based and coal-based PP have improved, while profits from methanol-based, PDH-based, and externally sourced propylene-based PP have declined. On the cost side, in the international crude oil market, the market continues to weigh the developments in the Russia-Ukraine situation, and concerns about long-term supply surplus persist, putting pressure on oil prices. The average international oil price dropped this week, with oil-based PP profit recovery at -587.77 yuan/ton. In the thermal coal market, downstream users currently show low enthusiasm for purchasing market coal, and sporadic transportation by end-users is only to meet production needs. Traders are mostly delaying their purchases, resulting in a slight decline in thermal coal prices, with coal-based PP profit slightly recovering at -516.76 yuan/ton.

In this period, looking at the profits of polypropylene (PP) by category in China, the average weekly profit for raffia PP is -587.77 CNY/ton, which has recovered by 10.49 CNY/ton from the previous period, an increase of 1.75%. The average weekly profit for household injection molding PP is -197.35 CNY/ton, a decrease of 122.66% compared to the previous period. The average weekly profit for impact copolymer PP is -35.92 CNY/ton, recovering by 11.94% compared to the previous period. By category, due to ongoing supply concerns and the average decline in international oil prices, the profits for most oil-based PP categories have recovered this period. Currently, the market has a relatively ample supply of raffia, limiting the profit increase for raffia PP to 1.75%. The prices for impact copolymer PP remain relatively firm, with profits increasing by 11.94%.

Imbalanced supply and demand: seeking new opportunities in the market adversity.

Table 3 Expected Supply and Demand Balance of Domestic Polypropylene

Supply: With the increasing number of equipment maintenance recoveries, the supply side is expected to show an increasing trend.

Ningbo Fortune's 400,000-ton per year facility is scheduled for maintenance, while Dongguan Juzhengyuan's two lines and Guangzhou Petrochemical's two lines have plans to restart, leading to a decrease in expected production loss due to planned maintenance. Regarding unplanned maintenance, the high cost pressure on PDH and externally sourced propylene companies is hard to alleviate, resulting in decreased production motivation for enterprises, and the possibility of increased temporary shutdowns and maintenance cannot be ruled out.

Demand: downstream orders are steadily rising slightly.

Downstream operating rates are showing structural differentiation, and downstream demand is also structurally differentiated. Mainstream orders are relatively weak, but there is an incremental demand for some modified and non-woven fabrics. It is expected that some operations will slightly increase next week. The average downstream operating rate is expected to reach 54.1%-54.3%.

Cost: Geopolitical uncertainties enhance support on the cost side.

Cost support on the supply side. Unstable geopolitical situation leads to supply risks, strengthening the support from oil-based costs. The import cost of propane has recently eased, while the cost support from PDH has declined.

Conclusion (Short-term) It is expected that the polypropylene market will display a weak downward oscillation trend in the next period. The market supply-demand contradiction is expected to escalate as mainstream demand slows down, and the year-end fund recovery affects market sales progress. Key points to focus on: 1. Supply-side expected increase. Some companies returning from maintenance, and although there are ongoing maintenance activities, the overall large-scale production capacity base leads to a trend of increased supply in the market. 2. Structural differentiation on the demand side. Limited follow-up on mainstream downstream orders, driven by year-end promotions of e-commerce and new energy vehicles, boosting demand for some modifications and injection molding. 3. Strengthened cost aspect. Unstable geopolitical situation leading to supply risks, strengthening oil-based cost support. Oil-based cost support is enhanced. The recent easing of propane import costs results in a decline in PDH cost support.

Conclusion (Medium to Long Term):The mainstream polypropylene market is expected to fluctuate downward, with a phase of low-price bottoming showing potential for a rise. The transaction in Eastern China for raffia is expected to be verified around 6250-6400 yuan/ton. The supply-demand conflict is dragging down market prices, with the demand side facing pressure from sluggish follow-up on new orders and high finished product inventory, limiting the enthusiasm for raw material procurement. The market is pressured by both long and short positions, with funds retreating for safety and transactions struggling to support the market due to delayed demand. The cost of oil production is showing a clear trend of easing recently due to geopolitical tensions, but the cost support of propane and propylene remains, and overseas Christmas orders next month could support the market with potential for a price increase.