China PP, PE inventories retreat from post-holiday peak but destocking pace slows

China’s polyolefin markets ended the first full week after the Lunar New Year holiday with inventories declining from their immediate post-holiday peak, although the pace of destocking slowed toward the end of the week.

Combined polypropylene (PP) and polyethylene (PE) inventories held by China’s two major domestic producers were reported at 870,000 tons on 27 February, unchanged from the previous day. This reflects a decline of 70,000 tons from the post-holiday high of 940,000 tons recorded on 24 February, the first trading day after the holiday.

Most of the inventory reduction occurred early in the week. Stocks fell sharply by around 65,000 tons on the second trading day after the holiday, indicating an initial round of restocking activity. However, this momentum weakened in the following days, with inventory reductions slowing significantly as the week progressed.

The slower destocking pace suggests that downstream demand has yet to fully recover. Market participants noted that many converters are still gradually resuming operations after the holiday, limiting the speed of inventory absorption.

Despite the recent decline, current inventory levels remain significantly higher than pre-holiday volumes of approximately 450,000 tons. This continues to weigh on overall market sentiment, keeping participants cautious.

Looking ahead, market players expect a clearer picture next week as downstream operating rates improve further. A stronger demand recovery will be necessary to accelerate destocking and reduce ongoing supply pressure in China’s PP and PE markets.

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