MonthlySSESSMENTS: July China PP Prices

Author: SSESSMENTS



  • Notable changes on local PP offers following the positive progress on US-China trade talks

  • Import PP offers during the month mostly stable

  • Traditional pattern for low and peak season might not be exactly the same as in the past


According to data collected by SSESSMENTS, offers for local PP Homo Raffia in China market have fluctuated in July. In the first week of the month, local offers recorded notable changes as compared to a week earlier. The increases between CNY50-350/ton ($7.2-50.4/ton) recorded in the local offers as supported by the firmer futures prices following the positive progress on US-China trade talks over the weekend. Moving to the second and third week of July, only several local producers decided to adjust offers while most traders cited the lack of supportive factors for the price adjustments. In the fourth week, local offers recorded decreased between CNY100-150/ton ($14.4-21.6/ton) compared to a week before, due to the softer futures prices and weak demand. Meanwhile, the local offers were kept stable in the week commencing July 29, as traders commented that upward adjustment would not be workable while tight supply only able to support stable prices.


Similarly, import offers of Saudi origin to China market recorded increased by $10/ton compared to a week earlier following the bullish sentiment in the market during the first week of July. However, the import offers were kept stable for the rest of the month. Market players also told SSESSMENTS that the import offers were only workable for re-exporters.


Demand for PP Homo Raffia in the country reported as sluggish during July. According to market sources report to SSESSMENTS, despite the positive signals on US-China trade talks in the week commencing July 1, demand for PP in China did not show any significant improvement. The producers’ inventory mostly moved to traders’ end instead of the converters. Some sellers reported receiving limited inquiries from buyers and some others informed that buyers’ interests in importing materials had weakened due to the volatile market dynamics.


During the first two weeks of July, no supply issue reported by market players to SSESSMENTS’ team despite several ongoing maintenance shutdowns at domestic PP plants. At the end of the second week, the 330,000 tons/year PP plant of Fujian Refinery Petrochemical (FREP) had resumed production after undergoing maintenance shutdown, while the company’s old PP plant with the capacity of 120,000 tons/year remained shut as of August 5 and no indication on restart date from the producer.


Moving on to August, market players remain uncertain whether tightness in supply would persist and whether the rebound in demand and prices would occur in the same month. The players opined to SSESSMENTS that the traditional pattern for low and peak season for PP might not be exactly the same as in the past. Besides, market players are also keeping an eye on Zhejiang Petrochemical’s 900,000 tons/year PP unit which will start production trial in Q4 2019. The PP unit is expected to significantly affect the market supply considering its huge capacity.














 

Tags: Asia Pacific,China,English,MonthlySSESSMENTS,Northeast Asia,Polypropylene (PP) China PP Prices,PP prices

August 5, 2019 5:43 PM