PP Inventory Climbs with Holiday Accumulation and Slow Consumption
1. China Total PP Inventory Mounted Up
According to SCI, China’s PP inventory on October 13, 2023 increased by 35.66% from September 29. Therein, the PP inventory at major PP producers, sample traders and sample ports moved up.
Remarks: PP inventory involves PP inventory at major producers (including crude oil-based and coal-based sample producers), sample ports and sample traders.
2. China PP Inventory at Major Producers Grew Notably
The PP producer inventory grew a lot by 43.73% W-O-W in the week ended October 13 with holiday accumulation and slower consumption. PP inventory at major producers grew W-O-W. There were fewer unit turnarounds in the last two weeks, and PP output this week was higher compared with the last week before the holidays, increasing the inventory pressure on producers. Moreover, the sales-output ratio at producers declined during the holidays, leading to notable inventory accumulation. Downstream users merely maintained hand-to-mouth purchases of PP with bearish sentiment, as their fresh orders were slack, even though some of them intended to stock up after the holidays. Therefore, the overall PP inventory consumption was slightly below average. At present, the PP producer inventory witnesses a Y-O-Y increment.
3. China PP Inventory at Sample Ports Inched Up
On October 13, 2023, PP inventory at China’s main ports rose by 3.16% W-O-W. The PP port inventory mounted up this week, as overseas shipments arrived in China gradually after China’s National Day and Mid-Autumn Festival holidays, but deals were sparse. The softer PP futures prices failed to boost the trading atmosphere, and falling feedstock costs during the holidays pulled down PP USD prices. Downstream users held a bearish stance amid slack fresh orders, so they were cautious in buying.
4. China PP Inventory at Sample Traders Climbed
On October 13, 2023, the PP inventory at sample traders climbed by 5.98% W-O-W this week. The PP inventory at sample traders rose a little this week. PP mainstream prices declined after the holidays because of softer futures prices and lowered offers by most producers. Traders faced higher sales pressure, and some of them had built the inventory. A few traders curtailed offers actively to promote sales, and low-priced deals were favorable in North China. Comparatively, deals were lackluster in East China and South China amid cautious sentiment of downstream buyers. Generally, the PP inventory at traders ramped up.
Some downstream users have the intention to replenish the inventory after the holidays. Participants are recommended to focus on the difference between growth rate of supply and that of demand. It is predicted that PP consumption may speed up this week after PP prices drop to lows.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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