Introduction: In recent years, under the current situation of oversupply of plastic knitting, corporate profit compression is obvious; This year, with the continued increase in the supply of plastic knitting, malicious competition between enterprises is under pressure, and the price war continues to make plastic knitting enterprises suffer serious losses. At the weekend, a proposal to reduce the price of insurance brushed the screen of the major plastic friends circle, tentatively scheduled for August 7, 2023 – August 31 period, Ping, Cang two counties plastic knitting enterprises to reduce production by 30%. This is the first joint initiative of plastic knitting companies, how will it affect the demand for polypropylene? How will the polypropylene market respond?

From 2018 to 2022, the compound annual growth rate of China’s plastic knitting production is -5.51%. From 2018 to 2022, the overall growth rate of plastic knitting production showed a downward trend.

After the rapid development in the early stage, the scale of the plastic knitting industry continues to expand, but with the development of environmental protection policies in 2018, some smaller and less competitive enterprises have been gradually eliminated, resulting in a decline in plastic knitting output in 2019, and public health events in 2020 have brought tests to the industry but also brought opportunities to the factory, especially in the second half of the year. Factory orders are improving and the industry is running at a high rate. In 2022, affected by global inflation, the plastic knitting industry faces the dual pressure of orders and costs, the enthusiasm of factories to start construction is suppressed, and the output shrinks again.

Last week (July 28 – August 3) the operating rate of plastic knitting enterprises was 43.66%, down 0.54% from the previous week, down 1.34% year-on-year. Due to the strong finishing of raw material prices, the cost pressure of plastic knitting increased slightly. Coupled with the current continuation of the off-season mode, the downstream industry, construction, agricultural production, food packaging and other demand has no bright performance, the industry volume is serious, the price war has become a trend, the woven bag price rise is weak, and the order situation continues to be light. Due to the high cost of opening and shutting down of the plastic knitting industry, the factory is generally not easy to stop, but is subject to the weak order demand of the terminal, and some factory workers have the phenomenon of “two days off two”, and the overall start remains low.

On the whole, the weak demand for plastic knitting starts to decline is not a matter of one day, the Cang, Ping two counties concentrated production reduction insurance or in a short time again to suppress the market mentality; With the return of polypropylene supply, the fundamental pressure of supply and demand continues to highlight, and the downward pressure of polypropylene is larger, it is recommended to pay attention to the subsequent market basis trend and inventory changes.