A China-based trader revealed to SSESSMENTS.COM that China’s domestic PP market took a breather from the relentless rally. This week, market sentiment has turned more bearish on the back of strong buyers resistance toward the higher prices following the continuous rally in futures and spot markets. Coming to the last trading day of the first week of June, buyers in China have retreated to the sidelines in response to the sudden drop in the futures market prices, coupled with rising domestic inventory levels.
September PP futures on Dalian Commodity Exchange have extended their losses for a second straight day, retreating from their highest settlement price in a week. On June 5, SSESSMENTS.COM pricing database noted that polypropylene (PP) prices on in the futures market settled at CNY7,375/ton ($1,036/ton), posting a reduction of CNY125/ton ($17.5/ton) compared to Wednesday’s settlement. Besides, as of Friday morning, June 5, the inventory level of the leading Chinese polyolefins producers recorded at 740,000 tons, an increase of 10,000 tons from a day earlier.
In a bid to boost sales and stimulates the demand, the trader applied a price reduction of CNY50-100/ton ($7-14/ton) on local PP Homo Raffia cargoes, while deciding to adjust down their offers for local PP Homo Fiber cargoes by CNY100-200/ton ($14-28/ton) from Thursday’s level. Despite the price adjustment, SSESSMENTS.COM was informed that most customers are reluctant to take the cargoes. Considering the current market situation, the trader expects local PP prices to move even lower by next week.
