China’s PP Market In Tedious Movement, Current Price Trend Expected To Persist In The Upcoming Week
- Local and import PP prices strolling in a different path
- Domestic PP demand remains dull mainly caused by the weather issues
- Players foresee sustainability of current price trend considering manifold factors
China PP market captured in tedious movement, players voiced out that the current price trend expected to persist in the upcoming week. On the week commencing July 20, SSESSMENTS.COM’s data showed that local and import offers for PP across all grades established in a distinct trend. In the local market, offers for all PP grades via a trader recorded stable compared to the offers available last Friday, July 17. From other traders, local offers for PP Homopolymer grades surfaced with decreases of between CNY50-200/ton ($7-28/ton) as compared to last week’s levels. These decrements were made as driven by the softer futures prices, some traders explained.
In the import market, SSESSMENTS.COM noted that the number of offers in the China market is quite limited this week. For fresh offers, there are second-half of August shipment offers from a South Korean producer. As noted, the producer’s offers for PP Homopolymer and Copolymer grades maintained a stable level compared to first-half August shipment offers. From another South Korean producer, August shipment offers for PP Block Copolymer cargoes surged by $50/ton from July shipment offers. Moreover, some Chinese traders that still have remaining import Middle Eastern PP Homo Raffia cargoes decided to maintain the offers stable from last week. Unfortunately, interest in import cargoes is still low. Especially for Middle Eastern cargoes, a trader stated that some buyers expressed their buy idea at $900-920/ton-level; which is around $30-40/ton lower than the trader’s offers and such a level is deemed too low for the trader.
Demand-wise, buying sentiment for PP in the China market remains sluggish this week. In fact, some players reported to SSESSMENTS.COM that the current state of demand is getting worse than last week following the terrible flood that happened in some provinces, which is said to be the worst in decades. On the supply front, the inventory of the two leading Chinese polyolefins producers recorded at 730,000 tons as of Wednesday morning, a reduction of 50,000 tons from Monday’s level.
For the outlook, the majority of Chinese market players contacted by SSESSMENTS.COM agreed that local PP prices would continue to head south in the upcoming week. Citing that local PP prices will eventually take a breath after a relentless rally in the past few weeks. Besides, coming to late July, supply for PP is expected to be sufficient since there are not many maintenance shutdowns at local producers’ plants. Additionally, domestic demand is also predicted to remain sluggish considering the weather-related issues.
