Passable Low-Priced Deals Dragged Down PP Inventory
1. China Total PP Inventory Declined
According to SCI, China’s PP inventory on March 31, 2023 declined by 3.90% from March 24. Therein, the PP inventory at major PP producers and sample trading enterprises fell, while that at sample ports 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 March 31, 2023, PP inventory at major producers registered a decrease of 3.33% W-O-W. Specifically, PP inventory rose at first but then declined in the week ended March 31. PP supply showed a downtick with more maintenance, and downstream enterprises and speculators stockpiled when PP prices dropped to lows. Thus, the overall inventory consumption was favorable. At present, the producer inventory is at a medium-to-lower level compared with the same period of last year.
3. China PP Inventory at Sample Ports Grew
On March 31, 2023, PP inventory at China’s main ports grew by 2.34% W-O-W. PP port inventory inched up in the week ended March 31 amid tepid deals. A few goods arrived in China at the end of March. Overseas suppliers still provided a slim number of quotations to China’s buyers, and China’s downstream users were inactive in purchasing because their orders improved limitedly and most of them had finished the stockpiles of feedstock.
4. China PP Inventory at Sample Traders Sank
On March 31, 2023, PP inventory at sample traders fell by 8.95% W-O-W. PP inventory at sample traders dipped in the week ended March 31 on the back of basic low-priced deals. Mainstream prices of PP inched down amid mixed futures prices. Some traders intended to promote dealings by cutting profits, and the downstream demand brightened slightly. Most of the downstream users had insufficient orders and maintained hand-to-mouth purchases of low-priced feedstock from traders.
5. Summary
The PP futures went public on February 28, 2014, and since then, the financial property of the spot products became stronger. The quantifiable data about supply-demand fundamentals played a more important role in judging the PP market trend. The data of production and import were transparent and hysteretic. Hence, the data were hard to become the main factor to forecast the market trend. Concerning raw materials inventory, it was difficult to collect its data, let alone collect it timely. Thus, inventory data became an irreplaceable and prominent factor to analyze the future market situation.
China’s PP supply inched up with gradual capacity expansions, but downstream processors showed weak appetites in stockpiling amid insufficient new orders. The PP supply and demand are in a soft balance, and the inventory consumption may be a little slow in the near term.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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