Seasonal Lull in BOPP Film Industry Leads to Reduced Procurement Activities in May

The Biaxially-Oriented Polypropylene (BOPP) film market in China is currently steady amid a scenario of sufficient supply but weak demand. This imbalance has resulted in challenges for manufacturers and downstream industries, particularly in the packaging industry. Despite stable feedstock prices for Polypropylene in Asia, muted demand sentiments have kept the market subdued. As of the third week May 24, the price for 30-micron BOPP film from domestic producers in China remained steady at USD 1395/MT FOB Shanghai, unchanged from the previous week's pricing.

Supply of BOPP film in China is ample, with manufacturers able to meet the existing demand. However, the weak demand from downstream industries, especially the packaging sector, has led to an imbalance in the market. The packaging sector, which is a major consumer of BOPP film, has remained weak, impacting the overall demand for the product.

In terms of raw materials, the price of Propylene, a key feedstock for Polypropylene and consequently BOPP film, has seen a broader decline in the Chinese market. This decline can be attributed to the overall weak demand and cautious procurement practices in the downstream industries. Propylene enterprises have faced poor sales, leading them to lower prices in an attempt to stimulate demand. However, this has not significantly boosted procurement activities, as market enthusiasm remains low.  As of the third week of May 2024, the price of feedstock Polypropylene in China settled at USD 1071/MT on an EXW Dalian basis.

The BOPP film industry entered its off-season in May, and replenishment operations by enterprises were primarily driven by immediate needs. This seasonal lull has resulted in reduced procurement activities, with companies restocking BOPP film only as necessary to meet their ongoing requirements. Consequently, demand remains weak, contributing to the overall subdued market conditions observed during this period.

Looking ahead, the BOPP film market in China is expected to remain challenging in the near term. The weak demand from downstream industries, coupled with ample supply and declining raw material prices, is likely to keep the market subdued. In the short term, the upstream Propylene market in China is expected to maintain stability at low prices. This projection is based on the current market dynamics, including weak demand and cautious procurement practices in downstream industries. The overall economic conditions, including the impact of external factors such as trade tensions and global economic trends, will also play an important role in shaping the market outlook.