Strong Demand Buoyed Q3 PP Market to Climb
Preface
In 2020, PP downstream industries performed well. Demand for PP from traditional fields stayed firm, and that from new-emerging fields was also strong, underpinning the market to trend upwards. As for supply, the PP supply is predicted to rise marginally by 3.93% in Q3, as capacity expansion speed is slower than expected. Copo PP (low melting flow index) output and PP fiber output rise a lot due to strong demand. In Q3, PP import volume is predicted to decline from Q2.
In the first three quarters of 2020, PP market prices saw noticeable ups and downs affected by COVID-19 pandemic and capacity expansion. Therein, PP market prices rebounded greatly in Q2 due to large demand elasticity for PP. Pandemic prevention and medical supplies consumed a large amount of PP fiber and transparent PP, and fast food containers and milk tea cups consumed a lot of homo injection materials.
According to SCI, PP fiber demand volume from January to May 2020 rose by 85%, and thin-walled injection demand volume rose by 11%. From January to March, sales of automobile diminished notably due to COVID-19 pandemic. Therein, sales in February 2020 decreased by 79% Y-O-Y, while that began to rally in March. From April to May, sales of automobile mounted up Y-O-Y, which buoyed the PP market from demand side.
Recently, plastic woven and BOPP enterprises were active in production, buoying the market from demand side as well. Generally speaking, demand growth rate hovered at 11%-13%, which was slightly lower than capacity growth rate, but supply-demand was relatively healthy in 2020.
