The relationship between crude oil prices and polypropylene

The relationship between crude oil prices and polypropylene

Wednessday, 03/05/2023 0

Through the advantages and disadvantages of the two types, we can see that: although paper packaging is better for the environment in terms of the post-consumer process, in general, it is not.

Plastic packaging of Tam Thanh

In the process of production and transportation, paper packaging consumes much more energy than plastic packaging. In terms of preservation, paper packaging is inferior in every way. At present, plastic packaging also has excellent printing ability. Combined with a variety of designs, they are better than plastic packaging in their ability to attract consumers' attention.

The raw material of plastic is a non-renewable resource. But with its durability and recyclability, plastic can be recycled continuously for a long time. As long as their recycling rate is higher, the potential for environmental impact is smaller. Currently, in addition to fossil fuels, plastic can also be synthesized from sources such as plants, bacteria, etc.

There was a time, a series of businesses switched from paper and wood packaging to plastic because the environmental impact of deforestation was too great. Therefore, if you are a business or a conscious consumer who wants to contribute to environmental protection, you should choose plastic packaging and actively respond to programs and movements to recycle and reuse products. plastic products.

Recently, due to the impact of the train jam on the Suez Canal, global gasoline prices increased sharply. As a derivative of petroleum, the price of synthetic resins also increases. Then, due to concerns about the epidemic situation in Europe and India, oil prices fell sharply again. Below we analyze a bit about the relationship between oil and plastic prices in general and Polypropylene (PP) in particular.

Packaging of Polypropylene granules

Relationship between oil price and Polypropylene (PP) price

Crude oil and PP prices have always been closely related. So, when the oil price changes, it will follow the change in PP price. The influence of crude oil on PP mainly lies in two aspects.


First, China's capacity to extract PP from crude oil reached 54%. The rise and fall of crude oil prices will greatly affect PP's production costs. However, at present, the raw material for PP production is not only located in petroleum. Therefore, in terms of raw materials, the impact on crude oil prices is not as great as before.


The second is the psychological reason. Crude oil is also a raw material for many common products in China. Crude oil fluctuations not only affect PP but also have a great influence on other commodities in the market.

Impact of PP price

Besides production costs, the market is influenced more by market sentiment and background. Recently, China's domestic PP prices have been affected by future projections. It is now below 9000 yuan/ton and continues to decline. The new production capacity of the supply side also has a certain influence on the market. On the demand side, affected by the previous increase in oil prices, profits from selling PP products were also limited. Price conversions are also slow and difficult to complete in the short term.

As a result, the market price decreased gradually and the PP market became opaque. Manufacturers that import PP materials are in a very careful state of observation and operation. To reduce inventory pressure, merchants need to sell more goods. However, manufacturers of PP products such as woven PP currently only import goods on demand, not hoarding.


Although the world is still in a state of emergency, the impact on oil prices will not last. In the long term, oil prices are expected to fall back to their previous levels. At that time, the increase in PP price due to the cost of raw materials will also decrease.

Regarding inventories, petrochemical enterprises are gradually reducing the amount of inventory. Leads to the general inventory of the petrochemical industry gradually accumulating. Although overall, such a quantity is still acceptable. But certain pressure is still there. On the demand side, terminal manufacturers still accept this price. However, they are no longer enthusiastic about ordering as before.

Although price adjustment measures are continuously introduced, the progress of lowering prices is still very slow. Before the market price stabilizes, it is difficult to improve the business situation and stabilize supply and demand. Overall, the PP field is still very weak and needs careful monitoring.

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