PP Inventory Inched Down on Just-Needed Dealings
1. China Total PP Inventory Declined
According to SCI, China’s PP inventory on May 12, 2023 declined by 5.96% from May 5. Therein, the PP inventory at major PP producers and sample ports decreased, while that at sample traders mounted 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 Fell
On May 12, 2023, PP inventory at major producers registered a decrease of 7.82% W-O-W. Specifically, PP inventory declined slightly in the week ended May 12 on basic purchases from downstream plants and traders. The producer inventory piled up notably during the Labor Day holiday. This week, PP output mounted up due to the restart of previously closed units and the operating rate increase, which further exacerbated the inventory pressure. However, the downstream demand was on a need-to basis, and the speculative demand improved limitedly because of bearish news in the macro environment and soft futures prices. Participants lacked confidence in the PP market. Accordingly, the producer inventory was consumed at a slow rate
3. China PP Inventory at Sample Ports Dipped
On May 12, 2023, PP inventory at China’s main ports dropped by 3.31% W-O-W. PP port inventory dipped in the week ended May 12 on hand-to-mouth purchases. The high exchange rate of USD against RMB enlarged the price spread between China-origin PP and imported PP, and the import arbitrage window kept closed. Low futures prices hampered spot market trading. Foreign suppliers provided scarce quotations to China market. In China, imported goods encountered high sales pressure as downstream buyers merely maintained an as-needed procurement of feedstock. Thus, the port inventor decreased a little.
4. China PP Inventory at Sample Traders Grew
On May 12, 2023, PP inventory at sample traders rose by 6.48% W-O-W. PP inventory at sample traders remained in an upswing in the week ended May 12 amid sluggish demand. Soft futures prices and lowered EXW offers by producers chipped away at market stances. Besides, downstream users confronted inventory accumulation of finished products and shrinking profits because of inadequate orders. Therefore, they represented limited initiative in purchasing PP, which led to an increment in sample traders’ inventories.
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