China PP Price Trend Managed To Sustain, Predicted To Last Until The End Of June
- Local and import PP prices move in the same direction
- Demand for a certain PP grade reported ongoing
- Outlook for PP prices remains positive despite the current demand condition
Within the week commencing June 22, SSESSMENTS.COM noted that local and import PP prices in the China market managed to maintain the upward trend and players predicted that the current price trend will last until the end of June. At the beginning of the week, a local polyolefins producer in the country made an upward price adjustment for PP Homo Injection and PP Homo Raffia between CNY25-50/ton ($4-7/ton) as compared to last week. The producer claimed that the increases of PP price in the futures market, relatively tight supply in the market and ongoing demand for PP Homo Raffia triggered the company to adjust prices. In the import market, offers for South Korean PP Block Copolymer for July shipment surfaced with a significant increase as much as $100/ton compared to June shipment. For Indian cargoes, PP Homo Injection and PP Homo Raffia prices increased by $20/ton as compared to a fortnight ago.
SSESSMENTS.COM was told that demand for local PP Homo Raffia is still ongoing, while demand for local PP Homo Injection is consistently sluggish. In the import market buyers gave a cold shoulder towards the high prices. Slow sales for the end-products and the traditional low season put customers in a cautious stance and procure on a hand-to-mouth basis. On the traders’ end, the uptrend of import offers and buyers’ resistance toward the high prices have hindered traders from actively doing the trading activities due to thin profit margin. On the supply front, PP inventory in the domestic market is relatively low. As of June 24, inventory level of the two leading Chinese polyolefins producers reported at 655,000 tons. The current level showed a total reduction of 100,000 tons as compared to Monday’s level (June 22).
In the days to come, even though buyers show a stiff resistance towards the high prices, Chinese market players opined that local and import PP prices would remain firm at least until the end of June. Citing the relatively tight supply and the uptrend in the international market on the back of firm propylene prices, most sellers are not under pressure to revise down offers, as stated to SSESSMENTS.COM.
