PP Inventory Dipped with Moderate Low-Priced Deals
1. China Total PP Inventory Dipped
According to SCI, China’s PP inventory on November 10, 2023 dropped by 0.51% from November 3. Therein, the PP inventory at major PP producers and sample traders declined, while that at 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 Declined
The PP producer inventory decreased by 0.18% W-O-W in the week ended November 10 with moderate deals. On the supply side, China’s PP output mounted up amid less maintenance. On the demand side, downstream processors purchased feedstock on a just-needed basis because of sporadic new orders and weak profitability. Backed by bullish macro news, traders replenished the inventory moderately from last week to the beginning of this week, but their stockpiles slowed down notably in the middle of this week. Especially, the speculative demand for PP declined a lot after crude oil values depreciated. Generally, the overall consumption of PP was average this week, and PP inventory now is higher than that in the same period of last year.
3. China PP Inventory at Sample Ports Edged Up
On November 10, 2023, PP inventory at China’s main ports rose by 1.67% W-O-W amid soft dealings. Limited imports arrived in China. The exchange rates of USD against RMB were range-bound, and the price spread between China-origin and overseas PP shrank. The import arbitrage window remained closed. Overseas suppliers provided limited quotations to the Chinese market, and the buying indications were far lower than the selling indications. The futures market of PP gained ground, but the trading atmosphere stayed tepid because soft profits dampened the buying initiatives of downstream processors. Traders faced slack sales accordingly.
4. China PP Inventory at Sample Traders Inched Lower
On November 10, 2023, the PP inventory at sample traders shed 3.51% W-O-W this week with certain low-priced deals. The PP futures prices rebounded, but slightly softer costs and weak supply-demand fundamentals weighed on the trading atmosphere. Traders still encountered slack sales, so they reduced purchases from PP producers and mainly consumed existing inventories. A few traders conducted hedging operations and have not yet found the right time to sell supplies after the futures prices rose in mid-week, rendering a slight accumulation in inventory. Downstream and end users had limited interest in buying because of poor orders and profits, so they mainly purchased low-priced goods to satisfy their rigid demand. Generally, the traders’ inventory merely decreased narrowly this week.
A lot of PP units have remained in downtime recently, reflecting comfortable supply pressure. However, downstream processors showed limited buying appetite amid slack new orders. It is predicted that the inventory consumption will probably be moderate in the short run.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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