PP Products Industry Shows Clear Divergence: Essential Needs Shine, Traditional Tracks Weaken

Introduction:Recently, the differentiation trend among various sub-industries of polypropylene products has intensified, with noticeable differences in demand across different fields. Driven by rigid demand, the PP non-woven fabric and modified PP markets have performed outstandingly, with non-woven fabric experiencing a month-on-month increase in consumption due to protective and medical demand. BOPP and CPP packaging films have seen an increase in orders driven by the "Double Twelve" e-commerce stocking demand. In contrast, traditional sectors like plastic weaving are experiencing continued weak demand and a significant decrease in order volumes due to the winter off-season and the broader market environment.

In the short term, the phased demand support within the industry coexists with the off-season pressure in traditional fields, and the trend of divergence will continue.

Table 1 Overview of Raw Material Consumption and Order Days in the Polypropylene Products Industry

Unit: 10,000 tons, days

Data Source: Longzhong Information

As the national weather turns cold, respiratory diseases such as influenza are on the rise, leading to a continuous increase in the market consumption of protective and medical supplies such as masks, medical bed sheets, and surgical packs. The raw material consumption in the PP non-woven fabric industry has increased by 0.59% month-on-month. The rigid demand for takeaway and instant delivery has kept the demand for disposable food containers, milk tea cups, and other products at a high level, resulting in an increase in the operating rate of the daily injection molding industry. With the Double Twelve e-commerce promotion approaching, the demand for stocking up on goods such as food, clothing, and tea has risen, boosting orders for BOPP and CPP packaging films. The order days for the BOPP industry increased by 2.20% month-on-month and 8.59% year-on-year; the order days for the CPP industry increased by 0.99% month-on-month and 24.35% year-on-year.

Currently, there is weak demand in mainstream packaging and other sectors. The BOPP and CPP industries continue to operate steadily, but the PP non-woven fabric industry has seen an increase in production by 0.25% due to the rising demand for masks and other protective gear driven by the flu outbreak. As we enter December, policies such as the halving of the purchase tax for new energy vehicles have boosted consumer enthusiasm for car purchases, leading to an increase in sales of new energy vehicles and supporting a rise in modified PP orders. Additionally, with the cold weather setting in, the production and stocking demand for small appliances such as air conditioners and heaters have commenced, bringing new orders for modified PP and thus slightly boosting the operating rate in the modified PP industry.

On the other hand, with December approaching New Year's Day, the demand for replenishment of daily plastic products such as fresh-keeping boxes and storage boxes in supermarkets has increased, leading to a decent demand for daily injection molding enterprises. In summary, driven by policies and seasonal demand, the polypropylene product industry (including eight downstream industries: plastic weaving, injection molding, BOPP, PP pipes, PP non-woven fabric, CPP, PP transparent, and modified PP) has seen an average operating rate increase of 0.10 percentage points to 53.93%.

Table 2 Overview of Market Forecast for the Polypropylene Products Industry

Unit: 10,000 tons, days

Data Source: Longzhong Information

Future Prediction:As the weather continues to cool down, the high incidence period for respiratory diseases such as winter flu persists, and the demand for protective consumables like masks and medical sheets will continue to support industry demand. The PP non-woven fabric market is expected to remain stable but is unlikely to see significant growth. The stocking demand for the Double Twelve e-commerce promotion will mostly wrap up by mid-December, and packaging orders for food, clothing, and other items may significantly decrease. Additionally, at the end of the year, businesses mainly focus on clearing inventory, leading to few new large orders in the BOPP and CPP industries, and raw material consumption continues to decline.

The daily use injection molding industry continues to experience steady demand driven by takeout and hot drinks, but industry operations are gradually declining. In sectors such as plastic weaving and PP pipe materials, the winter off-season may lead to insufficient order follow-up and pressure on profitability. Overall, the demand across various fields for PP downstream products is mixed. Coupled with the sluggish trend in cost, the replenishment of PP downstream products may mostly follow moderate orders, with the potential for further decline in profit margins.