A Chinese trader shared with SSESSMENTS.COM some factors behind the non-stop hike in domestic PP prices. As reported, local PP Homo Raffia prices from the trader's end increased continuously by around CNY100/ton ($14/ton) per day. These conditions have a few reasons, first of all; the positive information that has been circulating in the market about US President claiming that he had discussed with Saudi crown prince Salman about jointly cutting 10 million barrels production with Russia, and both countries have released their will to reach an agreement. This gives a positive impact as the market expects commodities prices will be up as well.
Another reason lies in the supply for PP Homo Raffia being lesser significantly on the grounds that some CTO-based producers switch their production to other PP grades. Traders mentioned to SSESSMENTS.COM, the decision to switch production was made mainly because the prices of PP Homo Raffia have plummeted to below CNY6,000/ton ($853/ton), reaching almost the same prices as the production cost of CTO-based PP. As profit narrowed, the producers considered switching their productions. So far, about half of the CTO-based producers are not producing PP Homo Raffia, which led to limited supply. Several producers, such as Shenhua are planning to develop the special material, such as high MI PP Copolymer, and another producer Ningxia Baofeng reported that one of their PP lines is now producing PP Homo Injection while another line is to produce low MI PP Copolymer. Both have not been producing PP Homo Raffia as of lately.
The other significant reason is during the COVID-19 pandemic, China has been the world-leading manufacturer and exporter of masks and other medical protective equipment. This condition drives the PP Fiber demands to greatly increased and conventionally support higher prices. SSESSMENTS.COM was told that prices for high melt PP Fiber also surged by CNY1,000/ton ($142/ton) on a weekly comparison due to striking demand for masks and other medical protective equipment amid intensified Coronavirus outbreak in other countries, thus encouraging other PP producers to switch producing PP Fiber, which affects the supply of PP Homo Raffia as well.
According to SSESSMENTS.COM pricing database, by Monday morning, April 13, PP Homo Raffia prices in China domestic market reached a new threshold as prices continue to rally during the weekend. Click here for the complete story.
