Transactions for import PP of India origin on LC at sight, CIF China Main Port basis
Description: *Offers on LC 90 daysMarket sources reported to SSESSMENTS.COM that Indian PP supplier revised export offers following domestic demand improvement. In comparison to a week earlier, the offers for PP Homo Raffia from the leading Indian petrochemical producer to the China market increased by $60/ton supported by the demand improvement in India’s domestic market. However, the latest price adjustment is predicted to get negative responses from buyers as the offers are deemed too high. Previously on May 27, a trader was offering PP Homo Raffia cargoes from the leading Indian petrochemical producer at $820-830/ton on LC at sight, CIF China Main Port basis, which is around $20-30/ton higher compared to the offer level on EXW basis.
Sources explained that in India, the demand is gradually improving as businesses start to re-open after the lockdown relaxations in the country. The leading Indian petrochemical producer stated to SSESSMENTS.COM that after the government announced a nationwide lockdown, the company had to move 75% of PP allocation to the export market as demand in the domestic market was very slow. As the government announced lockdown relaxations and factories restarted the production activity, the domestic demand has started to recuperate for the last two weeks. As such, the producer is allocating more PP grades to the domestic market from now onwards; by 60% of the total production volume will be allocated to the domestic market and the rest for the export market. Likewise, another Indian PP producer also decided to skip offering to the export market as the company will focus on selling in the local market citing domestic demand improvement.
Meanwhile, in China, the overall PP demand remains slow as downstream factories keep the procurement on a hand-to-mouth basis. Market sources also pointed out that the continuous reduction of inventory of the two leading Chinese polyolefins producers cannot be interpreted as robust demand. Most cargoes were moved to traders instead of converters, as coming to the end of the month, distributors or contract-based customers have to take the monthly quota. For Indian cargoes, a Chinese trader revealed to SSESSMENTS.COM that previously, there were a lot of deals concluded within the period from March to May. Even last week, market talks have it that Indian PP Homo Raffia sold at $800/ton-level, hence, buyers are being cautious in taking import cargoes from other origins, especially from the Middle East. However, the latest offers for Indian PP Homo Raffia cargoes at $860/ton-level was deemed to be unworkable and there would be no buyers in China willing to take cargoes at such a level.
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Tags: Asia Pacific,China,English,ISC,India,NEA,News,PP
Published on May 28, 2020 5:56 PM (GMT+8)Last Updated on May 28, 2020 6:01 PM (GMT+8)
