China Polypropylene (PP) Inventory Decreased W-O-W on Oct 18

China Polypropylene (PP) Inventory Decreased W-O-W on Oct 18

1. China’s Total PP Inventory Analysis

According to SCI, China’s PP inventory on October 18 decreased by 16.60% from October 11, 2019. Therein, the PP inventory at major PP producers, ports and trade companies declined.

2.China’s PP Inventory at Petrochemical Companies Analysis

According to statistics, the PP inventory at major PP producers on October 18, 2019 decreased by 19.28% W-O-W. The loss volume of output caused by the maintenance was about 48.6kt, down 30% W-O-W. Thus, thesupply of PP increased. After the National Day holiday, many downstream enterprises purchased feedstock successively and maintained their rigid demand,so PP producers’ inventories continued decreasing. But with PP market weakening, the inventories at Sinopec and PetroChina were reduced slowly.

3.China’s PP Inventory at Ports Analysis

The PP inventory at ports on October 18, 2019 decreased by 9.89% W-O-W. In the week ended October 25, 2019, the import volume of PP in primary forms declined from last week. The resources were mainly forward-month resources. The spotsupply of homo PP injection was obviously short. The imported PP inventory wasat low levels. The spot and front-month resources were basically sold out.There was nearly no inventory at some North China ports.

4. China’s PP Inventory at TradeCompanies Analysis

The PP inventory at trade companies on October 18, 2019 decreased by 0.20% W-O-W. Traders operated cautiously and had insufficient inventories.

5.Summary

The PP futures went public on February 28, 2014, since then, the financial property ofthe spot products became stronger. The quantifiable data about supply-demand fundamentals played a more important role in judging PP market trend. The dataof production and import were transparent and hysteretic, hence, the data were hardto become the main factor to forecast the market trend. Concerning raw materials inventory, it was difficult to collect its data, let alone collect ittimely. Thus, the inventory data became an irreplaceable and prominent factorto analyze the future market situation.

On the supply side, with Zhong’an United Coal Chemical, Dongguan Juzhengyuan Technology and Ningxia Baofeng Energy Phase II restarting their units smoothly,it’s predicted that the PP supply will increase later. At present, the inventory pressure at PP producers is not high, so they are in a good positionto adjust the PP price. On the demand side, the demand for PP is largely unchanged but not very strong. Next week, the PP inventory is supposed to cutslowly.

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