PP Recent Commodity Market Intelligence

I. Price Trends
- Spot Prices:
- On May 22, 2026, the Business Society’s benchmark price for PP (Raffia Grade) was RMB 9,850.00/ton, and for PP (Fiber Grade) it was RMB 10,050.00/ton.
- On May 21, 2026, the benchmark price for PP (Raffia Grade) was RMB 9,736.67/ton, and for PP (Fiber Grade) it was RMB 9,950.00/ton.
- As of May 26, 2026, the reference price for PP (Raffia Grade) stood at RMB 9,790.00/ton, up 2.51% compared to May 1; the reference price for PP (Fiber Grade) was RMB 10,025.00/ton, up 2.43% versus May 1.
- Futures Prices:
- On May 26, 2026, the main contract price for polypropylene futures was RMB 8,549.00/ton, rising by RMB 35.00 (+0.41%). The opening price was RMB 8,488.00/ton, closing price RMB 8,514.00/ton, intraday high RMB 8,558.00/ton, and intraday low RMB 8,486.00/ton.
- On May 25, 2026, the main contract price for polypropylene futures was RMB 8,667.00/ton, down 1.66%.

II. Supply-Demand Dynamics
- Supply Side:
- The number of restarted production units has increased recently, and operating rates are rebounding; however, actual output growth remains limited.
- As of May 20, 2026, China’s total commercial polypropylene inventory stood at 694,800 tons, down 37,200 tons (?5.08% week-on-week) from the previous period. Specifically: producer inventory declined ?5.65% week-on-week; sample trader inventory fell ?2.57% week-on-week; and sample port warehouse inventory decreased ?4.84% week-on-week.
- As of May 21, 2026, domestic PP plant weekly production loss amounted to 357,210 tons, up 0.66% week-on-week.
- Demand Side:
- Demand continues facing negative feedback: elevated raw material costs constrain downstream purchasing behavior, with most factories maintaining only just-in-time procurement—offering limited support to PP prices.
- Downstream industry operating rates are declining: For example, in the BOPP sector, high cost pressures have dampened new order inquiries from end-users; procurement is largely demand-driven, resulting in a notable decline in operating rates. Similarly, industries such as plastic weaving, PP nonwovens, and modified PP are currently in their traditional off-season, leading to weakening demand.

III. Cost Structure
- Crude Oil Prices: Rising crude oil prices provide cost support for polypropylene. Ongoing Middle East hostilities and the estimated 6–8 weeks required for full global crude oil logistics recovery introduce some downside risk to international oil prices; nevertheless, near-term cost support remains robust.
- Profitability:
- Profit margins for oil-based PP production have declined. Coal prices (used for coal-based PP) are expected to remain stable, suggesting a modest improvement in coal-based PP profitability next week.
- This week, profit margins for oil-based and PDH-based PP declined, while those for coal-based, methanol-based, and externally procured propylene-based PP improved.

Analysis & Assessment

I. Current Realities
- Current PP inventories are at relatively low levels, with spot supply tight and prices sustaining elevated levels. The persistent premium of spot over futures (i.e., high basis) strongly supports spot pricing.
- Rising crude oil prices further reinforce cost support for PP.

II. Forward-Looking Expectations
- The PP market exhibits a structural imbalance of rising supply but weak demand. On the supply side, although more units have resumed operation and operating rates have risen, actual output remains constrained. On the demand side, persistently sluggish conditions—exacerbated by high raw material costs—continue to suppress downstream procurement appetite.
- Looking ahead, increasing capacity additions and completion of scheduled maintenance shutdowns may intensify supply-side pressure. Meanwhile, demand is unlikely to improve significantly amid seasonal weakness and sustained cost pressure.

Outlook

I. Short-Term Outlook
- PP prices are expected to remain range-bound at elevated levels next week. Limited supply increases—combined with relatively firm cost support—will gradually shift market focus toward demand dynamics. However, the prevailing expectation of subdued mainstream demand will likely temper upward price momentum and guide the market back toward rationality.

II. Medium-to-Long-Term Outlook
- As industry-wide overcapacity pressures become increasingly evident and policy regulation tightens, the pace of PP capacity expansion will notably decelerate. Over the next five years, the industry is expected to enter a development phase characterized by “l(fā)ow-speed capacity growth and dynamic equilibrium.”
- Product structure optimization will become the core driver of PP supply-side upgrading. High-end differentiation will emerge as the focal point of enterprise competition, and import substitution will continue deepening. Output of high-end specialty grades will expand substantially, with product quality and performance progressively approaching international advanced standards.