Co-polymer PP Granules: Recent Market Intelligence Report

I. Price Trends
- Spot Prices: As of May 26, 2026, the spot price for low-melt co-polymer PP granules stood at RMB 9,600/ton, while the spot price for fiber-grade (homo-polymer) PP granules was RMB 9,708.33/ton. The fiber-grade price has persistently exceeded that of low-melt co-polymer PP, with the price spread remaining within the RMB 100–200/ton range.
- Futures Prices: On May 26, 2026, the main polypropylene futures contract (PP) closed at RMB 8,572/ton, up 0.68% from the previous trading day. The intraday price range was RMB 8,486–8,628/ton, and open interest increased by 1,058 contracts to 544,400 contracts.

II. Supply-Demand Dynamics
- Supply Side:
- Fiber-Grade PP: Raw material tightness and scheduled maintenance reduced domestic fiber-grade operating rates to below 20% in April; in May, delivery demand for futures contracts further withdrew available supply, intensifying market tightness.
- Low-Melt Co-polymer PP: Several maintenance-planned units resumed operations in April and shifted production capacity toward co-polymer grades, increasing co-polymer output and raising its production share—resulting in relatively ample market supply.
- Demand Side:
- Fiber-Grade PP: Robust export orders (primarily to Southeast Asia and the Middle East), coupled with steady domestic demand from plastic weaving and bulk bags, supported resilient demand.
- Low-Melt Co-polymer PP: Weak demand from the home appliance and automotive sectors—falling short of traditional seasonal expectations—led end-users to resist high raw material prices, resulting in purely just-in-time procurement. Orders for pallets and returnable containers remained sluggish, offering little demand support.

III. Key Market Drivers
- Structural Divergence: Differing supply-demand fundamentals between fiber-grade and low-melt co-polymer PP have driven the reversal in their price relationship—tight fiber-grade supply versus relatively loose low-melt co-polymer supply creates a stark contrast.
- Export Support: Significant export growth for fiber-grade PP has diverted domestic supply abroad, whereas low-melt co-polymer PP lacks comparable export channels, leaving its demand side persistently weak.
- Cost Transmission: Propylene monomer prices remain elevated, and dual-control policies on energy consumption and emissions continue to raise production costs; however, sluggish end-market demand constrains effective cost pass-through.

IV. Industry Developments
- Capacity Adjustment: In 2025, China’s co-polymer injection-molding PP output reached 8.1024 million tons, accounting for 26% of total national PP production. Among co-polymers, low-melt grades accounted for 49%, high-melt grades for 30%, and medium-melt grades posted a 46% year-on-year output increase—reflecting rising market demand for higher-value-added products.
- Policy Impact: The National Development and Reform Commission’s “Work Plan for Stabilizing Growth in the Petrochemical and Chemical Industry” explicitly identifies high-performance polypropylene materials as a key research and development priority, targeting an 82.6% domestic self-sufficiency rate for premium homo-polymer PP granules in high-end applications by the end of 2025—accelerating industry structural upgrading.
- Corporate Strategies: Leading enterprises—including Sinopec, PetroChina, and Ningbo Formosa Plastics—have strengthened market positions through technological upgrades and capacity optimization. Domestic substitution is accelerating, with Japanese Sumitomo Chemical and South Korean LG Chem seeing continued erosion of their market share in China’s medical-grade PP segment.

Analysis & Outlook
1. Short-Term Trend:
- Tight supply of fiber-grade PP is unlikely to ease significantly in the near term. Sustained export orders, combined with low trader inventories, will likely keep prices firm. Although low-melt co-polymer PP supply growth remains limited, subdued demand from home appliance and automotive sectors—amplified by seasonal weakness—will constrain upside potential; the price spread may stabilize within RMB 150–250/ton.
2. Medium- to Long-Term Risks:
- Significant volatility in crude oil prices or further tightening in propylene monomer supply could push up production costs—but weak downstream demand may cap any meaningful price increases.
- Growing demand from new-energy vehicles and premium packaging sectors may drive consumption upgrades in co-polymer PP granules; however, recovery in low-melt co-polymer demand hinges on tangible signs of rebound in the home appliance and automotive industries.

Forecast
1. Price Range:
- Low-Melt Co-polymer PP Granules: Prices are expected to fluctuate around RMB 9,500–9,700/ton in the short term. Without substantive improvement in downstream demand, prices may face downward pressure over the medium term.
- Fiber-Grade PP: Supported by supply constraints and export strength, prices may hold in the RMB 9,600–9,800/ton range; however, market participants should remain vigilant against potential spot-market pressure following the conclusion of the current futures delivery cycle.
2. Market Opportunities:
- Monitor rising demand for high-value-added co-polymer PP granules in new-energy vehicle components and premium medical packaging. Enterprises are advised to ramp up R&D investment in specialty catalysts and real-time quality control systems.
- Export-oriented firms should further expand into Southeast Asian and Middle Eastern markets, leveraging competitive advantages in fiber-grade PP exports to gain market share.
3. Risk Alerts:
- Closely monitor fluctuations in crude oil prices, stability of propylene monomer supply, and shifts in downstream sector demand to mitigate risks associated with ineffective cost pass-through or underperforming demand leading to price corrections.