Major events of Chinese PP market in Jul 2025

The 400kt/year PP plant of Yulong Petrochemical #4 was commenced around July 5, 2025, marking the 6th new unit launched this year. Up to now, the newly added total capacity of PP granule in the year has reached 2.75 million tons/year, and the total domestic capacity of PP granule has exceeded 47 million tons/year. From the perspective of regional structure, the new startup has little impact on the overall distribution.

In mid-to-late July, to implement the State Council's directives, five ministries including the Ministry of Industry and Information Technology issued the "Notice on Conducting an Investigation and Evaluation of Aging Equipment in the Petrochemical and Chemical Industry." The assessment targets production facilities in the petrochemical and chemical sector whose main equipment has either reached its designed service life or has been in operation for over 20 years as of May 30, 2025. The scope covers more than 20 sub-sectors under the "National Economic Industry Classification (GB/T 4754-2017)," including Categories 25, 26, 28, and 29, such as petroleum processing, basic chemicals, synthetic materials, fine chemicals, and emerging fields. Polypropylene, as a key representative of synthetic materials, is naturally included in this evaluation. Below is a list of PP plants commenced in or before 2004.

As can be seen from the figure above, e PP production capacity currently within the scope of the investigation totals 3.645 million tons/year, accounting for approximately 7.75% of total capacity, and the impact is relatively small. Notably, the capacity of long-term idled units stands at just 485kt/year.

On July 21, according to the China Customs, China imported 243.3kt of polypropylene in Jun 2025, down 15.19% compared to the same period of last year. Of all imports, homo PP imports accounted 153.6kt, down 15.76% compared to the same period of last year; co PP 78.4kt, down 13.27% year-on-year; ra co PP for 11.3kt, down 20.21% year-on-year. The total export volume of PP in Jun 2025 was about 235.3kt, a year-on-year decrease of 23.53%. Of all exports, homo PP exports accounted 209.4kt, down 24.29% compared to the same period of last year.

Up to now, PP has ended its pattern of net exports for three consecutive months in terms of total volume and failed to set a new record, though homo PP maintains its export surplus over imports for a fifth consecutive month.

In late July, the topic of "anti-involution" swept the market, triggering significant price volatility across commodities. PP futures and spot markets were also deeply affected, displaying unusual activity during the traditional off-season-though its performance remained subdued compared to other chemical products.

PP futures rose by more than 200yuan/mt, and spot price of homo PP raffia rose by about 100yuan/mt. However, this upward movement appears passive, with actual market demand remaining weak.

Regarding the new plant, the 450kt/year PP plant of CNOOC Ningbo Daxie petrochemical II #1was originally planned to be put into operation in July, but it is now expected to be postponed to August.