A Chinese PP producer shared with SSESSMENTS.COM regarding factors that sparked adjustment on local offers. This week, the latest offers from the producer’s side were hiked by CNY100/ton ($14/ton) as compared to Monday’s level (May 25), and by CNY200/ton ($28/ton) higher compared to last week’s level. The current offers are available at CNY7,800/ton ($1,090/ton) on cash, EXW China basis and including 13% VAT. To date, some deals were managed to conclude at the initial offer level. The producer further explained that the upward adjustment was triggered by some reasons, such as higher propylene prices week over week, the relatively low inventory level of the two major polyolefins producers in the country as well as firmer prices from the producers’ end as an impact of the short supply.
Demand-wise, the producer informed SSESSMENTS.COM that buying sentiment in the domestic market is getting better over the week. The producer stated that some converters are now noticing the uptrend in PP prices. Besides, the sales for finished products have slightly improved as of recent. However, some other converters remain on a wait-and-see stance as they doubt that the current uptrend would be long-lived.
Looking ahead, the producer is not sure about the movement of local PP prices in the days to come. The producer opined to SSESSMENTS.COM that the movement of PP prices would heavily depend on the state of demand and production costs. However, if propylene prices continue to head up in the near future, PP prices most likely will follow suit. Meanwhile, approaching June, if the economic sector could recover from the impact of the coronavirus pandemic, the producer believes that the digestion rate of PP end-products would be healthier and the chance for PP prices to move further up will be higher.
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