According to a China-based trader, most Chinese buyers are showing stiff resistance towards local and import PP price adjustment as there are no strong demand fundamentals to support any form of price increases. Since last week, SSESSMENTS.COM pricing database noted that spot prices have been relentlessly headed higher, buoyed by the firmer futures market. September PP futures on Dalian Commodity Exchange consistently settled above CNY7,000/ton-threshold, settling at CNY7,500/ton ($1,054/ton) on June 3, an increase of CNY151/ton ($21/ton) from Monday’s settlement. In contrast, downstream demand has yet to pick up accordingly as most manufactures still scramble to increase sales volume in the export and domestic market. As such, the trader remains concerned that these issues will exert downward pressure in PP prices in the near term.
In the domestic market, the trader initiated a price increase of CNY200/ton ($28/ton) for local PP Homo Raffia cargoes as compared to last week’s level, available in the market between CNY7,800-8,000/ton ($1,097-1,125/ton) on cash, EXW China basis and including 13% VAT. From the import market, the trader received import PP Homo Injection and PP Homo Raffia from Vietnam at $940/ton, or $90/ton higher than offer level available in three weeks ago. While on a week-on-week basis, import offers for PP Random Copolymer Injection from a Vietnamese producer are between $30-40/ton higher, available at $1,070/ton. However, the trader is reluctant to take the cargoes since the offer level is considered too high. For Middle Eastern cargoes, the trader mentioned to SSESSMENTS.COM that some re-exporters expressed their buying idea for PP Homo Raffia cargoes between $850-860/ton for prompt delivery, which is much lower than spot prices. All import offers are on LC at sight, CIF China Main Port basis.
For the outlook, the trader voiced out to SSESSMENTS.COM that PP prices will face mounting pressure from sluggish downstream demand despite the rally in futures market and crude oil prices.
Click below to view related stories and content on China PP:
MonthlySSESSMENTS: May China PP Prices
NewsSSESSMENTS: Updates On Local PE, PP Prices In China Market June 2
NewsSSESSMENTS: Review Of China PP Homo Raffia Market Week 22, May 25-29
September 2020 PP Futures Price Settlement on Dalian Commodity Exchange (DCE) between May 25 - June 3
Local PP offers on cash, EXW China basis (including 13% VAT in CNY terms, all equivalent in USD excluding VAT)
Import PP offers on LC at sight, CIF China Main Port basis
Tags: Asia Pacific,China,English,NEA,News,PP,SEA,Vietnam
Published on June 3, 2020 3:25 PM (GMT+8)
