quarterlyssessments-q2-2020-china-pp-prices

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Sharp fluctuations in PP prices were seen in April
Demand for PP in Q2 2020 was weak
Two local producers will start-up PP unit in July

Based on the data gathered by SSESSMENTS.COM, China PP prices fluctuated in Q2 2020. Sharp fluctuations were seen in April as four digits adjustments were applied on local offers on a day interval. At the beginning of the week commencing April 13, local PP offers increased significantly. The cumulative increases of offers for PP Homo Raffia and PP Homo Injection were CNY1,800-2,000/ton ($256-284/ton) and CNY2,300/ton ($327/ton), respectively. Factors causing such increases were firmer futures prices, stronger crude oil prices, reduced supply as some producers switched production to PP Homo Fiber, bullish buying sentiment, and speculation of traders. On April 15, local offers for PP Homo Raffia dropped between CNY1,000-1,500/ton ($142-213/ton) from levels a day earlier due to softer futures prices coupled with unsupportive demand from downstream customers. On the first day of the week commencing April 20, local PP Homo Raffia offers were reported at CNY50-500/ton ($7-71/ton) lower than a week earlier. Then, after crude oil prices dropped to negative territory on April 21, another reduction of CNY1,000/ton ($142/ton) was applied.

On the first trading day in May after the Labor Day holiday (May 6), local PP offers increased between CNY100-400/ton ($14-57/ton) compared to levels recorded before the holiday. A week later, local PP offers were on a downtrend again. In the second half of May, local PP offers in China found momentum to move higher once again supported by limited supply and higher feedstock costs. The increments were between CNY100-200/ton ($14-28/ton) on a weekly comparison. A similar pattern of price movements was seen in June, SSESSMENTS.COM noted. In the first week of the month, local PP Homo Raffia offers went up by CNY100/ton ($14/ton) from the previous week following increases in the futures market. In the following week, local PP Homo Raffia and PP Homo Injection prices were adjusted down between CNY100-600/ton ($14-85/ton). In the second half of June, local PP offers increased slightly, by CNY50/ton ($7/ton) in the third week and between CNY25-50/ton ($3-7/ton) in the fourth week on a weekly comparison.

Similar to local offers, a spike in import PP Homo Raffia offers were seen in the week commencing April 13. Offers for PP Homo Raffia from a Saudi producer were adjusted up by $100/ton while offers for PP Homo Raffia of Vietnam origin increased between $150-160/ton on a weekly comparison. In the last week of the month, the falloff in the offers was recorded. Offers for PP Homo Raffia of Vietnam origin decreased by $120/ton from two weeks earlier. In May and June, import PP offers to China mostly moved upward supported by limited supply and firm monomer and crude oil prices. June shipment PP offers from a Malaysian producer surfaced with an increase of $30-40/ton while July shipment offers from the same producer increased between $30-80/ton on a monthly comparison. On June 22, SSESSMENTS.COM was informed that July shipment offers for PP Block Copolymer from a South Korean producer surfaced with a significant increase of $100/ton compared to June shipment offers.

In general, the actual demand for PP in the second quarter of 2020 was weak since transactions recorded during price uptrend were mostly done by hedgers. Most converters were still running below the normal production rates due to slow sales. Converters enjoying satisfactory sales and run at maximum capacity were mask converters only. SSESSMENTS.COM was told that among all converters in China, only around 20% are mask manufactures. Moreover, concern over the second wave of the COVID-19 outbreak dragged down demand for PP further down. On June 13, the Beijing government reimposed lockdown following new cases of COVID-19 infections. On the supply side, domestic supply for PP was tight during the quarter, particularly for PP Homo Raffia because some producers switched to produce other PP grades, mostly to PP Homo Fiber. On the plant news, SSESSMENTS.COM was told that Liaoning Baolai Petrochemical planned to conduct a trial run at its two PP lines on July 20, 2020. Each line has a capacity of 300,000 tons/year. Likewise, Zhongke Petrochemical also scheduled to start up its new PP units in July. The producer’s two PP units with a total capacity of 550,000 tons/year are located in Zhanjiang, Guangdong Province, China.

Entering Q3 2020, some market players contacted by SSESSMENTS.COM predict that PP prices in China will remain firm supported by high propylene prices and tight supply. However, some others foresee that due to the low season for PP in July and the arrival of a considerable volume of import cargoes in the same month, there might be slight downward corrections on PP offers. Moreover, there will be additional supply from the new start-up PP plants in the country.

Range of local/localized PP transactions in April on cash, EXW China basis (including 13% VAT in CNY term, excluding VAT in USD term)

Origin	Product	Transaction Type	Offers (CNY/ton)	Equivalent in USD/ton)
China	PP Block Copolymer	Offer Given	6,100-9,000	767-1,132
China	PP Block Copolymer	Offer Received	8,600-9,360	1,082-1,177
China	PP Homo Film	Price List	7,366	927
China	PP Homo Injection	Price List	6,500-10,350	818-1,302
China	PP Homo Injection	Offer Given	6,900-8,500	868-1,069
China	PP Homo Raffia	Offer Given	6,100-9,500	767-1,195
China	PP Homo Raffia	Price List	6,300-11,500	793-1,447
Vietnam	PP Homo Raffia	Purchased	6,800-6,900	855-868
China	PP Homo Raffia (CTO)	Offer Given	8,700-8,800	1,094-1,107
China	PP Homo Raffia (CTO)	Sold	6,830-8,750	859-1,101
China	PP Random Copolymer Injection	Price List	7,650-9,500	962-1,195

Range of import PP transactions in April, CIF/CFR China Main Port basis

Origin	Product	Transaction Type	Offers (USD/ton)	Payment Term
Far East Asia	PP Block Copolymer	Offer Given	850-890	LC at sight
Far East Asia	PP Block Copolymer	Offer Received	800	LC at sight
Far East Asia	PP Block Copolymer	Bid Given	810	LC at sight
Far East Asia	PP Block Copolymer	Sold	780-850*	LC at sight
Far East Asia	PP Block Copolymer	Sold	800	LC 30 Days
Middle East	PP Block Copolymer	Offer Received	800-830	LC at sight
Southeast Asia	PP Block Copolymer	Offer Received	850-1,050	LC at sight
Southeast Asia	PP Block Copolymer	Purchased	760-910	LC at sight
Southeast Asia	PP Block Copolymer	Sold	850	LC at sight
Far East Asia	PP Homo Film	Sold	730**	LC at sight
Southeast Asia	PP Homo Film	Offer Given	875	LC at sight
Southeast Asia	PP Homo Film	Sold	835	LC at sight
Far East Asia	PP Homo Injection	Offer Given	800-860*	LC at sight
Far East Asia	PP Homo Injection	Bid Given	730	LC at sight
Far East Asia	PP Homo Injection	Purchased	810	LC at sight
Far East Asia	PP Homo Injection	Sold	730-**860	LC at sight
Indian Subcontinent	PP Homo Injection	Offer Received	770***-880	LC at sight
Middle East	PP Homo Injection	Offer Given	770	LC at sight
Middle East	PP Homo Injection	Offer Received	760-780	LC at sight
North America	PP Homo Injection	Offer Received	810	LC 90 Days
Southeast Asia	PP Homo Injection	Offer Received	820**-880	LC at sight
Southeast Asia	PP Homo Injection	Sold	800-880	LC at sight
Far East Asia	PP Homo Raffia	Offer Given	800-850*	LC at sight
Far East Asia	PP Homo Raffia	Offer Received	680-760	LC at sight
Far East Asia	PP Homo Raffia	Bid Given	730	LC at sight
Far East Asia	PP Homo Raffia	Purchased	680	LC at sight
Far East Asia	PP Homo Raffia	Sold	750-810*	LC at sight
Indian Subcontinent	PP Homo Raffia	Offer Received	770***	LC at sight
Indian Subcontinent	PP Homo Raffia	Purchased	685	LC at sight
Indian Subcontinent	PP Homo Raffia	Sold	830	LC at sight
Indian Subcontinent	PP Homo Raffia	Sold	830	LC 90 Days
Indian Subcontinent	PP Homo Raffia	Sold	725	LC 30 Days
Middle East	PP Homo Raffia	Offer Given	710-800	LC at sight
Middle East	PP Homo Raffia	Offer Received	770*-900	LC at sight
Middle East	PP Homo Raffia	Purchased	810	LC at sight
Middle East	PP Homo Raffia	Sold	740	LC 60 Days
North America	PP Homo Raffia	Offer Received	810	LC 90 Days
North America	PP Homo Raffia	Bid Given	800	LC 90 Days
Southeast Asia	PP Homo Raffia	Offer Given	830-840	LC at sight
Southeast Asia	PP Homo Raffia	Offer Received	800-980	LC at sight
Southeast Asia	PP Homo Raffia	Buy Idea	800	LC at sight
Southeast Asia	PP Homo Raffia	Purchased	870***	LC at sight
Southeast Asia	PP Homo Raffia	Sold	740-800	LC at sight
Southeast Asia	PP Random Copolymer Injection	Sold	960*	LC at sight
Far East Asia	PP Random Copolymer Blow	Offer Given	980	LC at sight
Far East Asia	PP Random Copolymer Blow	Offer Received	900-995	LC at sight
Far East Asia	PP Random Copolymer Blow	Sold	900-990	LC at sight
Middle East	PP Random Copolymer Blow	Offer Received	850-860	LC at sight

Description: *May shipment **Offers on CFR basis ***June shipment

Range of local/localized PP transactions in May on cash, EXW China basis (including 13% VAT in CNY term, excluding VAT in USD term)

Origin	Product	Transaction Type	Offers (CNY/ton)	Equivalent in USD/ton)
China	PP Homo Injection	Price List	7,800-9,050	981-1,138
China	PP Homo Injection	Offer Given	7,300-8,000	918-1,006
China	PP Homo Raffia	Offer Given	7,300-8,000	918-1,006
China	PP Homo Raffia	Price List	7,300-8,800	918-1,107
China	PP Homo Raffia	Sold	7,200-8,000	906-1,006
Vietnam	PP Homo Raffia	Sold	7,200*	906
China	PP Homo Raffia (CTO)	Offer Given	7,300-7,350	918-925
China	PP Homo Raffia (CTO)	Sold	7,400-7,420	931-933
China	PP Random Copolymer Blow	Offer Given	8,100-9,100	1,019-1,145
China	PP Random Copolymer Injection	Offer Given	8,900	1,120
China	PP Random Copolymer Injection	Price List	7,800-8,700	981-1,094

Description: * Offers on TT

Range of import PP transactions in May, CIF/CFR China Main Port basis

Origin	Product	Transaction Type	Offers (USD/ton)	Payment Term
Far East Asia	PP Block Copolymer	Offer Given	860-890*	LC at sight
Far East Asia	PP Block Copolymer	Offer Received	940*-1,000	LC at sight
Far East Asia	PP Block Copolymer	Sold	850-890	LC at sight
Middle East	PP Block Copolymer	Offer Received	860**-1,040	LC at sight
Southeast Asia	PP Homo Film	Buy Idea	850	LC at sight
Far East Asia	PP Homo Injection	Offer Given	860**	LC at sight
Indian Subcontinent	PP Homo Injection	Offer Received	850*	LC at sight
Indian Subcontinent	PP Homo Injection	Sold	825	LC 90 Days
Middle East	PP Homo Injection	Offer Given	870	LC at sight
Middle East	PP Homo Injection	Offer Received	830-990	LC at sight
Southeast Asia	PP Homo Injection	Offer Received	850-895	LC at sight
Far East Asia	PP Homo Raffia	Offer Given	860**	LC at sight
Indian Subcontinent	PP Homo Raffia	Offer Given	800-830	LC at sight
Indian Subcontinent	PP Homo Raffia	Offer Received	800***-860	LC at sight
Indian Subcontinent	PP Homo Raffia	Purchased	785-800***	LC at sight
Indian Subcontinent	PP Homo Raffia	Sold	835	LC 90 Days
Middle East	PP Homo Raffia	Offer Given	820-865	LC at sight
Middle East	PP Homo Raffia	Offer Received	810**-990	LC at sight
Middle East	PP Homo Raffia	Buy Idea	800-805	LC at sight
Middle East	PP Homo Raffia	Purchased	800	LC at sight
North America	PP Homo Raffia	Offer Received	810-825	LC at sight
South America	PP Homo Raffia	Offer Received	790	LC at sight
Southeast Asia	PP Homo Raffia	Offer Given	850-880	LC at sight
Southeast Asia	PP Homo Raffia	Offer Received	850-870*	LC at sight
Southeast Asia	PP Homo Raffia	Sold	850	LC at sight
Far East Asia	PP Random Copolymer Injection	Offer Given	910	LC at sight
Far East Asia	PP Random Copolymer Injection	Offer Received	995-1,000*	LC at sight
Far East Asia	PP Random Copolymer Injection	Sold	900	LC at sight
Southeast Asia	PP Random Copolymer Injection	Offer Received	1,000	LC at sight
Far East Asia	PP Random Copolymer Blow	Offer Given	980*-1,020	LC at sight
Far East Asia	PP Random Copolymer Blow	Offer Received	990**	LC at sight
Middle East	PP Random Copolymer Blow	Offer Given	920	LC at sight
Middle East	PP Random Copolymer Blow	Offer Received	920**-1,090	LC at sight

Description: *June shipment **Offers on CFR basis ***July Shipment

Range of local PP transactions in June on cash, EXW China basis (including 13% VAT in CNY term, excluding VAT in USD term)

Origin	Product	Transaction Type	Offers (CNY/ton)	Equivalent in USD/ton)
China	PP Homo Injection	Price List	7,800-8,600	981-1,082
China	PP Homo Injection	Offer Given	7,750-8,150	975-1,025
China	PP Homo Raffia	Offer Given	7,650-8,150	962-1,025
China	PP Homo Raffia	Price List	7,600-8,150	956-1,025
China	PP Homo Raffia (CTO)	Offer Given	7,630	960
China	PP Homo Raffia (CTO)	Sold	7,850-7,860	988-989
China	PP Random Copolymer Injection	Price List	7,900-8,700	994-1,094

Range of import PP transactions in June, CIF China Main Port basis

Origin	Product	Transaction Type	Offers (USD/ton)	Payment Term
Far East Asia	PP Block Copolymer	Offer Given	940-990*	LC at sight
Far East Asia	PP Block Copolymer	Offer Received	920-940	LC at sight
Far East Asia	PP Block Copolymer	Sold	940-970*	LC at sight
Middle East	PP Block Copolymer	Offer Given	950-970	LC at sight
Middle East	PP Block Copolymer	Offer Received	950**-1,080	LC at sight
Southeast Asia	PP Block Copolymer	Offer Given	1,000**	LC at sight
Southeast Asia	PP Block Copolymer	Offer Received	1,070	LC at sight
Southeast Asia	PP Block Copolymer	Sold	980	LC at sight
Middle East	PP Homo Film	Offer Received	980	LC at sight
Central Asia	PP Homo Injection	Offer Received	860-870	LC at sight
Far East Asia	PP Homo Injection	Offer Given	950**	LC at sight
Indian Subcontinent	PP Homo Injection	Offer Given	890-900	TT
Indian Subcontinent	PP Homo Injection	Offer Received	910-920	LC at sight
Middle East	PP Homo Injection	Offer Given	900-920	LC at sight
Middle East	PP Homo Injection	Offer Received	930	LC at sight
North America	PP Homo Injection	Offer Given	800	LC 90 Days
North America	PP Homo Injection	Offer Received	850	LC at sight
North America	PP Homo Injection	Sold	840	LC at sight
Southeast Asia	PP Homo Injection	Offer Given	940**	LC at sight
Southeast Asia	PP Homo Injection	Offer Received	940-1,040	LC at sight
Central Asia	PP Homo Raffia	Offer Received	860-870	LC at sight
Far East Asia	PP Homo Raffia	Offer Given	900-950	LC at sight
Indian Subcontinent	PP Homo Raffia	Offer Given	850-900	LC at sight
Indian Subcontinent	PP Homo Raffia	Offer Received	900-920**	LC at sight
Indian Subcontinent	PP Homo Raffia	Sold	900	LC at sight
Middle East	PP Homo Raffia	Offer Given	810-930	LC at sight
Middle East	PP Homo Raffia	Offer Received	870-1,030	LC at sight
Middle East	PP Homo Raffia	Buy Idea	830-850	LC at sight
Middle East	PP Homo Raffia	Purchased	890	LC at sight
Southeast Asia	PP Homo Raffia	Offer Given	940**	LC at sight
Southeast Asia	PP Homo Raffia	Offer Received	940	LC at sight
Southeast Asia	PP Homo Raffia	Sold	920**	LC at sight
Southern Africa	PP Homo Raffia	Offer Received	860	LC at sight
Southern Africa	PP Homo Raffia	Purchased	860	LC at sight
Far East Asia	PP Random Copolymer Extrusion	Offer Given	1,080**	LC at sight
Southeast Asia	PP Random Copolymer Extrusion	Offer Given	1,120**	LC at sight
Southeast Asia	PP Random Copolymer Extrusion	Offer Received	1,150	LC at sight
Southeast Asia	PP Random Copolymer Injection	Offer Received	1,070	LC at sight
Far East Asia	PP Random Copolymer Blow	Offer Given	1,040**	LC at sight
Far East Asia	PP Random Copolymer Blow	Sold	1,010*	LC at sight
Middle East	PP Random Copolymer Blow	Offer Received	1,130-1,180	LC at sight
Southeast Asia	PP Random Copolymer Blow	Offer Given	1,060**	LC at sight

Description: *June shipment **July Shipment

Tags: Asia Pacific,China,English,NEA,PP,Quarterly

Published on July 7, 2020 10:08 PM (GMT+8)
Last Updated on September 16, 2020 9:31 PM (GMT+8)

QuarterlySSESSMENTS: Q2 2020 China PP Prices

Author: SSESSMENTS

QuarterlySSESSMENTS: Q2 2020 China PP Prices

Author: SSESSMENTS

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