Downstream Players In China Market Lamented Continuous Adjustments On PP Prices
- August shipment offers from a South Korean producer posted an adjustment
- Fujian Refining & Petrochemical Company (FREP)’s old PP plant remains shut as of July 14
- Local PP prices predicted to be stable to firmer
As reported to SSESSMENTS.COM, downstream players in the China market were lamenting the continuous adjustments on PP prices. On Monday, July 13, offers for local PP Homo Raffia recorded stable to firmer between CNY50-150/ton ($7-21/ton) over the week. However, on the following day, sources reported that the local offers for PP Homo Raffia were captured stable to softer between CNY50-100/ton ($7-14/ton) compared to Monday’s level following the downward movement in the futures market. On the same day, a trader decided to reduce offers for local PP Homo Raffia and PP Homo Injection by CNY100/ton ($14/ton) compared to last Wednesday’s levels. As for other PP grades, a downward adjustment of CNY100/ton ($14/ton) was recorded for local PP Impact Copolymer Injection as compared to the same period. Contrastingly, local offers for PP Random Copolymer Injection hiked by CNY150/ton ($21/ton) also compared to last Wednesday’s level.
From the import market, sources informed SSESSMENTS.COM that August shipment offers for import PP Homopolymers and PP Copolymers grades from a South Korean producer increased by $30/ton from July shipment. While on a weekly comparison, the offers were recorded an increase of between $30-40/ton. Sources also mentioned that deals for PP Block Copolymer, PP Homo Raffia, and PP Homo Injection from the producer were concluded at $10/ton lower than the initial offer levels. Sources added that the producer divides the allocation into two halves and the offers for the second half will most likely move higher between $20-30/ton than the current offer levels. In the meantime, a global trading house stated that the company managed to sell import Middle Eastern PP Homo Raffia cargoes to re-exporters at $940/ton for August shipment. Although in general, buyers’ buy ideas for Middle Eastern PP Homo Raffia cargoes were at $900/ton. Further added, offers for import PP Homo Raffia cargoes of India origin were available between $900-915/ton. All offers on LC at sight, CIF China Main Port basis.
In general, buying sentiment for PP in China is reportedly flat. Some converters stated to SSESSMENTS.COM that the company is yet figuring the quantity needed for August productions. Hence, converters are not in a rush in making purchases, especially when the demand for finished products remains slow. Other converters revealed that the company prefers to keep the procurement on an as-needed basis as their profit margin has been squeezed due to the higher raw materials costs while finished product prices could not follow. On the production sector, market sources informed that Fujian Refining & Petrochemical Company (FREP)’s old PP plant with a capacity of 120,000 tons/year remains shut as of July 14. Sources added that there is a possibility for the plant to remain shut for more than a month. Previously, the plant located in Fujian Province, China was shut on July 1 for maintenance works, which is expected to finish around ten days. While on the supply front, the inventory of the two leading Chinese polyolefins producers recorded at 720,000 tons as of Wednesday morning, a reduction of 20,000 tons from Monday’s level.
Looking ahead, market players opined to SSESSMENTS.COM that local PP prices will most likely be stable to firmer considering the relatively tight supply in the market. However, some sources predict that the increment will be in a limited range since buying sentiment remains flat.
Local PP offers 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 | 7,850-8,150 | 993-1,030 |
| China | PP Homo Raffia | Offer Given | 7,850-8,250 | 993-1,043 |
| China | PP Homo Raffia | Price List | 7,800-8,150 | 986-1,030 |
| China | PP Random Copolymer Injection | Price List | 8,650-8,950 | 1,094-1,132 |
Import PP offers on LC at sight, CIF China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| Far East Asia | PP Block Copolymer | Offer Given | 1,010 |
| Far East Asia | PP Block Copolymer | Offer Received | 1,010 |
| Far East Asia | PP Block Copolymer | Purchased | 1,000 |
| Far East Asia | PP Homo Injection | Offer Given | 980 |
| Far East Asia | PP Homo Injection | Offer Received | 980 |
| Far East Asia | PP Homo Injection | Purchased | 970 |
| Far East Asia | PP Homo Raffia | Offer Given | 980 |
| Far East Asia | PP Homo Raffia | Offer Received | 980 |
| Far East Asia | PP Homo Raffia | Purchased | 970 |
| Indian Subcontinent | PP Homo Raffia | Offer Given | 900-910 |
| Indian Subcontinent | PP Homo Raffia | Offer Received | 915** |
| Middle East | PP Homo Raffia | Buy Idea | 900 |
| Middle East | PP Homo Raffia | Offer Given | 890-930 |
| Middle East | PP Homo Raffia | Offer Received | 940-960 |
| Middle East | PP Homo Raffia | Sold | 940* |
| Far East Asia | PP Random Copolymer Blow | Offer Given | 1,070 |
Description: *To re-exporters **September shipment offers
Tags: Asia Pacific,China,English,NEA,PP,Weekly
Published on July 15, 2020 11:30 AM (GMT+8)
Last Updated on July 15, 2020 11:30 AM (GMT+8)
