[PP Weekly Review]: Supported by High Production Costs and Continued Supply Contraction, the Polypropylene Market Remains Strong (October 9–17, 2026)

1) Domestic polypropylene production this week totaled 679,600 metric tons, down 13,700 metric tons (1.98%) from last week’s 693,300 metric tons; compared to 801,000 metric tons during the same period last year, production decreased by 121,400 metric tons (15.16%).

2) Supply: The average polypropylene capacity utilization rate for this period fell by 1.31% week-over-week to 64.97%, while Sinopec’s capacity utilization rate rose by 2.13% week-over-week to 62.46%; The restart of PP units at Sinopec-Saudi Tianjin and Sinopec-Korea Petrochemical contributed to the rise in Sinopec’s capacity utilization rate. During the period, concentrated shutdowns of units such as Yanchang Zhongmei’s Line 2, Zhejiang Petrochemical’s Line 4, and Jinneng Chemical’s PP Unit 2 led to a decline in the average polypropylene capacity utilization rate.

3) Demand: This week, the average operating rate of domestic polypropylene downstream industries rose by 6.55 percentage points to 42.88%. According to market research, essential restocking for food packaging began after the holiday, combined with advance stockpiling ahead of “Double Eleven.” Orders for film manufacturers have rebounded, and production lines that had previously reduced capacity have quickly resumed operations. Film factories have resumed operations and concentrated on increasing production loads, leading to a significant rise in operating rates; Manufacturers of daily necessities and small household appliances resumed operations en masse after the holiday, with supporting orders being steadily released, prompting factories to proactively increase production loads; downstream sectors such as the automotive and home appliance industries gradually replenished inventories, leading to a recovery in raw material procurement demand, with manufacturers slightly raising operating rates, though the increase was modest; orders for sanitary products and disposable goods showed no significant growth, and post-holiday operating rates saw only a slight recovery. Overall, demand across various manufacturing sectors is currently diverging, with weak end-market profitability and orders primarily consisting of short-term stockpiling. Production capacity utilization may continue to rise in the coming period.

4) Commercial polypropylene inventory for this period stood at 620,800 metric tons, which is largely in line with the previous period’s forecast. This is primarily due to tight supply across the industry chain and a low inventory base.

2. Market Analysis for This Week

National 1: Analysis of Domestic Polypropylene Market Price Trends (yuan/metric ton)

Weekly Price Fluctuations in the Domestic Polypropylene Market

Geopolitical tensions have continued to keep input costs firm, providing support to the market. Upon reopening after the holiday, the market rose rapidly, with the national average price for spun yarn reaching 10,683 yuan per metric ton—an increase of 731 yuan per metric ton, or 7.35%, compared to pre-holiday levels. Upon resuming trading after the holiday, the market surged significantly. On October 7, Iran announced that the Strait of Hormuz had been closed, indicating that geopolitical risk premiums remain in place. Tight raw material supply and rising costs have become key drivers supporting the upward trend in polypropylene prices, leading to a sharp rise in futures prices. With market expectations that raw material shortages will not ease quickly in the short term, speculative buying sentiment has intensified, pushing spot prices up by approximately 700–800 yuan per metric ton compared to pre-holiday levels. On the demand side, during the “Silver October” peak season, the resumption of work after the holiday and restocking of raw materials drove temporary transactions. However, squeezed downstream margins and limited acceptance of price hikes by end-users have constrained the sustainability of restocking. Currently, PP supply tightness persists, and the market continues to test demand-side acceptance by pushing prices higher; in the short term, PP is expected to remain strong.

3. Market Influencing Factors

Expectations of increased supply persist, as PP plants—including the China-Saudi Tianjin (450,000 metric tons/year), Jingbo Polyolefins (400,000 metric tons/year), Lihe Zhixin (300,000 metric tons/year), and Ningxia Baofeng Line 3 (500,000 metric tons/year)—have resumed operations, maintaining expectations of rising supply. Over the coming week, key attention should be paid to the status of polypropylene plants such as Daqing Refining & Chemical’s 300,000 metric tons per year facility, Ningbo Jinfa’s Line 1 (400,000 metric tons per year), and Guoneng Yulin’s 300,000 metric tons per year facility. Reference prices for polypropylene filament in East China range from 10,550 to 10,850 yuan per metric ton. Demand is expected to remain favorable, with e-commerce promotions driving demand for food packaging and certain small household appliances; however, high raw material prices will dampen downstream purchasing enthusiasm. The outlook for the demand side remains positive. Downstream average operating rates are expected to reach around 43.4% next week; the strong basis spread between near- and far-month polypropylene contracts has narrowed, and weekly production plans have been brought forward. Following price adjustments by local petrochemical companies, market restocking driven by essential demand is expected to materialize. Monitor the intensity of restocking and the recovery of basis and inter-month spreads. In the long term, supply increases are expected to become progressively more pronounced starting in late October. Unless market demand sees a significant uptick, supply-demand pressures will become more pronounced, and the market is expected to face the risk of a correction from current highs.

4. Market Forecast for Next Week

Changes in the Main Polypropylene Market Over the Next Three Weeks (yuan/metric ton)