Market players reported to SSESSMENTS.COM that the China market is currently out of control and due to this, the government has decided to step in to intervene. Currently, local prices in the domestic China market have been surging continuously as supported by several factors, one of them is expectation of rebound in crude oil prices following the agreement between Saudi crown prince Salman to jointly cut 10 million barrels/day production with Russia. However, the polyolefins price increment somewhat is becoming uncontrolled day by day and left the market in a mess. For PE grades, the prices for local HDPE Yarn skyrocketed from CNY6,150/ton ($872/ton) to CNY7,300/ton ($1,035/ton) on a fortnight comparison. Whereas for high MI HDPE Injection, the price for localized Iranian cargoes recorded between CNY11,500-15,000/ton ($1,630-2,127/ton)-level.
Particularly for PP, the remarkable prices were mostly captured for PP Homo Fiber as caused by significant improvement in demand. Citing that the material is the main material to produce masks which are currently on high demand due to Coronavirus pandemic. During the weekend, the prices for PP Homo Fiber with high MI captured between CNY10,000-20,000/ton ($1,418-2,836/ton). Approaching Tuesday, April 14, the prices were increased again to CNY25,000/ton ($3,545/ton). All offers on cash, EXW China basis and including 13% VAT. Market talks have it that some offered at CNY50,000/ton ($7,090/ton)-level and as high as CNY88,000/ton ($12,478/ton), while rumour has it that the materials were sold at CNY60,000/ton ($8,508/ton). Utilizing the momentum, SSESSMENTS.COM was told that most Chinese manufacturers are now switching its production from PP Homo Raffia to PP Homo Fiber.
Due to the insanely high prices in the local market and since players could not control the market anymore, the Chinese government decided to step into the market and intervene. Further added to SSESSMENTS.COM, the government reportedly will clampdown on players who jack up the price in bad faith.
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