As SSESSMENTS.COM noted, China spot PP offers continue to head south due to lack of support from the fundamental demand. Since Wednesday, April 15, local PP Homo Raffia offers in China have started to cool down following the softer futures prices and weak sentiment. On Wednesday, some traders adjusted down local PP Homo Raffia offers by CNY1,000-2,000/ton ($141-283/ton) within a day interval citing difficulties in moving the cargoes. By Thursday, local PP Homo Raffia offers dropped by another CNY500/ton ($71/ton) from the previous day.
Stiff resistance from converters towards the higher prices was cited as the main factor behind the continuous price reduction. As told to SSESSMENTS.COM, converters face with a thin profit margin as PP prices surged drastically, while demand from their finished products has yet to fully recover. Responding to the current situation, a Chinese trader opined that local PP Homo Raffia prices will continue to move down as demand from downstream factories remains weak. However, the reductions are said to be insignificant as it is close to the delivery month for May 2020 PP contract, while supply for PP Homo Raffia in the spot market is limited as most producers ramp up and switch production to higher-value PP grades, such PP Fiber.
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