Market sources informed SSESSMENTS.COM that traders utilized the shift in China PP price trend to make profits. According to the source, traders are aggressively taking orders from producers and most asked for more allocation to hedge in September 2020 contract prices. “PP market speculation is obvious. Most players are actively exploring the higher prices,” one of the sources said.
Demand for PP is actually not improving, but some foreign suppliers sold out PP cargoes to the China market. The leading Indian petrochemical producer sold out PP Homo Raffia at $725/ton on LC 30 days while an Omani producer sold out at $740/ton on LC 60 days, both on CIF China main port basis. Market sources told SSESSMENTS.COM that the cargoes went to traders’ hands. As the traders are hedging, delay in shipment is not an issue.
Local and import PP prices in China were on an uptrend. Local offers have increased between CNY600-700/ton ($85-99/ton) compared to last week following the increases in futures prices. Meanwhile, import PP Homo Raffia offers from Vietnam were adjusted up by $15/ton compared to a day earlier. Market sources explained to SSESSMENTS.COM that compared to settlement at the end of March, crude oil prices have increased quite significantly. Therefore, it is reasonable if polymer prices increased. Considering the current sentiment, PP prices might continue to move higher.
