Several Factors Predicted To Put Pressure On China PP Market, Price Trend Will Shift In The Near Future
- Local and import PP prices moved in tandem
- Traditional pattern hampered demand for PP resins
- Considering several factors, Chinese market players stated a cloudy outlook
Chinese market players foresee that the PP price trend will shift in the near future as several factors are predicted to put pressure. On June 15, one of the local polyolefins producers in China informed SSESSMENTS.COM that the company has adjusted up the offers for PP Homo Injection and PP Homo Raffia by CNY50/ton ($7/ton) as compared to last week. Tight supply stemming from the previous plant issues claimed as the reason behind the upward price adjustment. From the trader’s end, an upward price adjustment of CNY50/ton ($7/ton) compared to a day earlier, was captured on June 16. The increases in PP prices in the futures market are the major ground of the upward price adjustment. In the import market, offers for PP Homo Raffia and PP Block Copolymer from the leading Saudi polyolefins producer surged by $50/ton as compared to last week’s level. For Malaysia origin cargoes, offers for PP Homo Raffia and PP Homo Injection for July shipment have gone up between $30-50/ton as compared to the offers for June shipment. The deals for PP Homo Raffia of Malaysia origin achieved at $20/ton lower than the initial level, at $920/ton on LC at sight, CIF China main port basis.
Based on the data collected by SSESSMENTS.COM, demand for PP resins is subdued due to the traditional low season in China market. During this time, buyers show resistance towards high prices and prefer to digest inventory on hand. As such, customers gave the cold shoulder to the import PP offers from Malaysia, as the prices deemed too high. On the production front, Liaoning Baolai plans to start the trial run at its two PP lines with a total capacity of 600,000 tons/year on July 20. Likewise, Zhongke Petrochemical is also planning to start its new PP unit in July. The producer has two PP lines with a total capacity of 550,000 tons/year.
Looking ahead, Chinese market players stated a cloudy outlook for the PP market, taking into account the new capacities that slated to come on-stream in the near term. Added to that, more imported materials will arrive by the end of June or early July. As such, the ample supply is predicted to put pressure on prices, and in turn, leads to downward adjustments from sellers, as stated to SSESSMENTS.COM.
