Weak Demand, High Supply Pressure Keep China PP Market in Consolidation Phase

Key Highlights:

• Indian PP prices range from ₹92,500 to ₹1,00,000/MT across grades.
• China’s PP prices fell 2.06% due to weak fundamentals
• Operating rates at ~76% despite some plant outages
• 1.4 million tons of new capacity to hit market in H2 2025

PP Price Snapshot: India and China PP Price

• MRPL's TQ Film grade (HF010) is priced at ₹98,000/MT in Mundra, while HMEL's Injection Moulding grade (M12RR) stands at ₹95,250/MT in Bhiwandi. 
• Marlex's Raffia grade (HGX030SP) is comparatively lower, priced at ₹92,500/MT in Chennai. The highest among the listed is MRPL's Lamination grade (HY035R), quoted at ₹1,00,000/MT in Rajkot.
• Domestic PP prices in China continue to show a fluctuating and consolidating trend. The average mainstream offer for wire-grade PP is reported at USD$1015/ton, marking a 2.06% decline from early July. 
• The market remains under downward pressure due to limited cost support and weak demand fundamentals.

Demand-Supply Dynamics: Stable inventories and operating rate

• Demand: The market is currently in the traditional off-season for PP consumption, resulting in weak downstream demand. End-user industries such as plastic weaving, construction, and agriculture are operating at reduced capacity. 
• Merchants are making purchases primarily on a need-only basis, and there is no significant forward stocking activity. Orders are mostly limited to small-volume or contract-bound deals, indicating sluggish liquidity in the market.
• Supply: While some plants like Yanchang and Jingbo remain offline, restarts at facilities like Quanzhou Guoheng and Zhejiang Petrochemical have balanced out the impact, keeping the industry operating rate around 76%. 
• Weekly output has averaged ~780,000 tons, and inventory levels remain stable at similar levels. The market is also preparing for the ramp-up of 1.4 million tons of new production capacity in the second half of 2025 (Zhenhai Line 4, Yulong Line 4), suggesting a more pronounced supply glut going forward.

Market News: Crude and feedstock prices stabilised

• On the cost side, recent easing of geopolitical tensions in the Middle East and Eastern Europe and clarity over OPEC+ production plans have stabilized crude oil prices. 
• As a result, propylene and propane prices remain weak, providing limited support for PDH-based PP producers. 
• Although there has been a modest recovery in propylene prices, the gains are narrow and insufficient to boost overall cost margins. 
• Raw material market trends continue to reflect soft fundamentals.

Market Expectation: No strong demand or export triggers on the horizon

• With weak raw material support, abundant current and future supply, and subdued demand, the Chinese PP market is expected to remain in a stagnant and volatile phase in the near term. 
• The bearish sentiment among market participants, coupled with the absence of strong export or domestic triggers, indicates that prices may continue to consolidate unless significant production cuts or demand revival emerge.