China PP Market Stagnant Amid Supply Pressure and Weak Demand

Key Highlights

1. Prices: PP stable in Hong Kong & China, but Indian domestic prices slipped 1.03% in August.
2. Raw Materials: Crude and propane softened, reducing cost support for PP.
3. Supply: Output rose with new restarts; inventory climbed above 830,000 tons.
4. Demand: Seasonal slowdown with weak downstream buying; market sentiment remains bearish.

Price Trends – PP Weakens Domestically, Stable in Asian Markets

• In the Hong Kong market, PP Injection and PP Raffia prices were assessed stable at US$ 890/MT, while PPCP stood at US$ 935/MT. 
• In China, PP Fiber was quoted at US$ 895/MT (CFR Huangpu), PP Copolymer at US$ 920/MT (CFR Guangzhou), PP Raffia at US$ 865/MT (CFR Shanghai), PP Injection at US$ 860/MT (CFR Shanghai), and PP Film at US$ 890/MT (CFR Huangpu).
• The Chinese polypropylene (PP) market weakened in mid-August, with prices fluctuating downward. 
• As of August 20, the mainstream offer price for wire drawing grades averaged 7,215 RMB/ton, marking a 1.03% decline from early July. 
• Market pressure stemmed from a softening in raw material costs, sluggish demand, and ample supply levels.

Raw Material & Cost Support

• Crude oil prices eased as geopolitical tensions in Eastern Europe subsided and OPEC+ maintained steady production guidance. 
• Propane trends mirrored crude oil movements, reducing the cost support for PDH-based producers. 
• Propylene prices rose briefly but later fell as supply tightened and then loosened, aligning with the weak demand. 
• Overall, upstream raw materials showed signs of loosening, leaving PP costs under pressure.

Supply & Demand Dynamics: Seasonal Weakness and Limited Buying Activity

• Domestic PP operating rates edged up slightly, with overall utilization reaching around 78%. Weekly output averaged above 780,000 tons. Despite maintenance shutdowns at Langang Petrochemical and Dushanzi Petrochemical, fresh restarts at Zhongke Refining & Chemical and Yanchang, along with the near commissioning of a 900,000-ton line in Daxie, Ningbo, added to supply pressure. 
• Inventory levels climbed above 830,000 tons, with slow destocking. The supply side continues to limit upward price support.
• Demand remained weak amid the seasonal low in consumption, with downstream players limiting purchases to small orders and contract deliveries. 

Domestic & International Market: HMEL, Formosa, BOPET, and Total Energies Developments

• HMEL has announced price protection in PP until 31st August 2025 or the next price revision, effective from 21st August 2025.
• Formosa Plastics Corporation (FPC) is expected to announce its PVC offers for September 2025 shipments on 26th August 2025 (Tuesday).
• BOPET rates have been revised downward by Rs. 2000/MT (specific thin & thick grades), effective 24th August 2025.
• Total Energies lifted the Force Majeure (FM) on its PP plant in Gonfreville, France, on 20th August 2025, after seven months. 
• The FM was initially declared on 16th January 2025 due to an unexpected shutdown at the plant, which has a production capacity of 200,000 tons/year.

Expert Opinion: Stagnant Market Expected in Short Term

• Plastic weaving, construction, and agricultural segments showed potential for restocking ahead of the seasonal shift, but macroeconomic uncertainties and weak exports kept demand sentiment subdued. 
• With abundant supply, weak demand, and bearish sentiment dominating, the PP market is expected to remain stagnant in the short term.