China PP Prices Dip in 2025, to Keep a Downtrend in 2026
China’s PP prices spiraled at lows and then remained in a downtrend from January to October, with the average price hitting a five-year low. The highest and lowest prices were RMB 7,510/mt and RMB 6,540/mt respectively in early January and mid-October. From January to the beginning of June, PP prices dropped mainly because of plentiful supply, sluggish demand and negative sentiment triggered by trade friction-related information. However, PP prices rallied from mid-June, as crude oil prices surged amid heightened geopolitical tensions in the Middle East, and market sentiment improved. By late June, a ceasefire agreement between Iran and Israel led to a rapid unwinding of the geopolitical premium in crude oil value, weakening cost support for PP prices.
In early July, the macro information regarding “anti-involution” brought expectations of supply reduction and improved industry sentiment. Yet, the price growth momentum remained limited because the supply-demand imbalance was not eased. In H2 2025, as policy expectations ratcheted down, the PP market reverted to being driven primarily by fundamentals. Traders and downstream users merely purchased PP at low prices on a hand-to-mouth basis, reflecting weak demand peak season. Moreover, PP producers and traders held a risk-avoiding attitude and were willing to promote sales by cutting offers before the National Day holiday, leading to a downward trend in PP prices. After the holiday, falling crude oil and propane prices, as well as renewed volatility in Sino-U.S. tariffs, intensified bearish sentiment among market participants, accelerating the price decline in October.
China’s PP prices may slide from November to December 2025, as the demand may dip gradually during the demand dull season. And some downstream and end factories will intend to recoup funds at the end of a year, leading to a reduction in new orders.
In the future, continuously expanding capacity will probably be a major factor hindering PP market prices, while relatively slow demand growth will provide limited support to the price. Besides, unstable cost support may hardly buoy PP prices effectively. However, expectations for improved economic growth and the intensive introduction of a series of stimulus policies will offer strong support for a rebound in PP prices. In 2026, PP prices are expected to continue declining, given changes in supply and demand for related products, market dynamics, industry policy directions and changes in international trade flows. The annual average price of PP is projected to drop by 5.4% YoY, with a reduced fluctuation range. Prices are supposed to remain in H1 2026, while they are supposed to rally in H2 2026 on the back of market condition improvement.
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