PP Market Consolidates Amid Ample Supply, Weak Demand

Key Highlights

1. China Price: 7,426.67 RMB/ton (↓ 0.74% MoM)
2. Operating Rate: 77% with stable output (~750,000 tons/week)
3. Upcoming Capacity: +1.4 million tons expected next quarter
4. Demand Softness: Post-festival slowdown and off-season procurement
5. Global Signals: Positive tariff news fading; crude oil firm on geopolitical risk

PP Market Price: PPCP and PPHP Prices Steady in Delhi Market

• In Delhi, PPCP random grades are priced as follows: Reliance SRM100NC is the highest at ₹1,09,000/MT, followed by Haldia M312 at ₹1,04,000/MT and IOCL 3120MA at ₹1,03,000/MT. 
• For PPHP Raffia grades, Marlex HGX030SP is available at ₹97,000/MT. In PPHP Injection Moulding (IM), MRPL HM012T is priced at ₹95,000/MT, and OPAL MH13 is quoted at ₹94,500/MT.
• In the Chinese market, by May 27th, the mainstream offer for wire-drawing grade polypropylene (PP) from domestic producers and traders was approximately 7,426.67 RMB/ton, reflecting a slight decrease of 0.74% compared to the beginning of May. 
• Price movements across most PP brands remained narrow, indicating a consolidating and stable market sentiment.

Demand-Supply Dynamics: Operating Rates Stable, Supply Pressure Looms

• The supply side remained abundant towards the end of May, with stable operating rates at domestic PP plants averaging 77%. Weekly average output stabilized around 750,000 tons. Capacity losses from earlier maintenance by firms like JuzhengRMB and Jinergy Chemical have been largely offset by restarts at units such as Lanzhou Petrochemical. 
• Moreover, a new production capacity of 1.4 million tons is expected in the coming quarter, raising the likelihood of supply-side pressure continuing. Although domestic inventory levels declined to below 820,000 tons, they are still considered relatively high, exerting downward pressure on spot prices.
• On the demand front, the market entered a traditional off-season, with sluggish demand across plastic weaving, agriculture, and construction sectors. Consumption had peaked before the Dragon Boat Festival, and buyers shifted to small-volume procurement for essential operations.
• Export activity showed minor improvement following earlier positive developments from US-China tariff suspension talks, but meaningful volume gains remain limited and slow to materialize. Overall, demand stayed subdued, unable to drive significant price momentum.

Global PP Market News

• Several macroeconomic and geopolitical factors impacted the market. Tariff-related optimism from mid-May’s US-China talks temporarily boosted sentiment. 
• However, this impact is now tapering off. On the raw material side, global crude oil prices remained firm due to ongoing geopolitical tensions in the Middle East and Eastern Europe.
• Domestically, supply-side pressure in the propylene market and easing propane trade restrictions point to potential relief in feedstock costs for PDH-based producers. 
• Yet, price differentiation among feedstocks continued, adding complexity to cost projections for PP producers.

Expert Opinion: Flat Trend Expected Amid High Inventory and New Capacity

The PP market is expected to continue its consolidation phase in the near term. While upstream support is moderate, ample supply and off-season demand conditions persist. Traders and buyers are cautious, and the market may remain flat unless significant changes in production or demand occur. Stakeholders should closely monitor the rollout of new capacity and shifts in inventory levels for short-term direction.