Alternating Direction On PP Price Trend In China Market
- Import offers above $1,000/ton-level still unworkable
- Overall demand not yet recovered as export demand for finished products not yet coming back
- Slight chance for price adjusted lower in the following weeks
On the week commencing June 29, SSESSMENTS.COM noted that PP pricing in China market shows changing signs following uptrend occurred last week. According to the price list released by Chinese polyolefins producers, PP Homopolymer price decreased between CNY100-300/ton ($14-24/ton) as compared to the last week-level following futures market softening on Monday (June 30) trade. Still, local PP producers kept PP Homopolymer prices stable following last-week price at CNY8,075-8,150 ($1,141-1,152/ton) on EXW basis and including 13% VAT as they still do not have inventory pressure either. Going into Tuesday, June 30, futures polypropylene trade for September 2020 in Dalian Commodity Exchange settled at CNY7,424/ton ($1,049/ton), an increase as compared to Monday settlement at CNY7,381/ton ($1,043/ton). Spot prices are relatively stable according to market players.
From the import market, traders informed that so far only received Thailand origin PP offers with PP Copolymer grades between $1,070-1,150/ton, while PP Homo Injection at $1,040/ton with no comparison from last week. Saudi producer offering PP Block Copolymer and PP Homo Injection at $900-920/ton and $950-970/ton, respectively. These offers recorded gains between $40-50/ton compared to June shipments price. Meanwhile, PP Homo Raffia offers from Middle Eastern producers are rollover from the previous week, available between $880-900/ton. From other regions, the marketing arm of South Korean polyolefins producer told SSESSMENTS.COM that deals concluded for South Korean PP Block Copolymer cargoes at $970/ton, $10/ton lower from initial offers. All import offers on LC at sight, CIF China Main Port.
Regarding demand, a trader reported that it has not recovered yet from the downstream factories, especially when finished product demand from the export market is not coming back yet. Converters are only placing orders on a hand-to-mouth basis these days with local PP cargoes becoming the main source. As a trader stated, more and more buyers switch to source locally as the price is more attractive as the gap between imports and the local price is quite substantial nowadays. With imported prices perceived too high, SSESSMENTS.COM noted that buying sentiment for July shipment weakened.
Looking ahead, SSESSMENTS.COM noted there are no signs of a downtrend in the near term for PP in the China market as feedstock price keeps firm. However, market players projected that if Southeast Asia demand is softening, suppliers might move the PP cargoes to China and the price could be adjusted. There is a signal that price might change in months to come as import volume in May reported by market sources at 634,000 tons, increased by 41% from April and by 57% compared with last year’s same period. As such, China's local market will face pressure when the cargoes arrive at the port.
Local PP offers on cash, EXW China basis (including 13% VAT in CNY term, all equivalent in USD excluding VAT)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton |
|---|
| China | PP Homo Injection | Offer Given | 8,075-8,150 | 1,010-1,019 |
| China | PP Homo Injection | Price List | 7,800-7,900 | 976-988 |
| China | PP Homo Raffia | Offer Given | 7,800-8,150 | 976-1,019 |
| China | PP Homo Raffia* | Offer Given | 7,630 | 954 |
| China | PP Homo Raffia | Price List | 7,800-8,150 | 976-1,019 |
| China | PP Random Copolymer Injection | Price List | 8,300-8,700 | 1,038-1,088 |
Description: *CTO, coal-based
Import PP offers on LC at sight, CIF China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Payment Term |
|---|
| Far East Asia | PP Block Copolymer | Offer Given | 1,010 | LC at sight |
| Far East Asia | PP Block Copolymer | Sold | 970 | LC at sight |
| Middle East | PP Block Copolymer | Offer Given | 950-970 | LC at sight |
| Southeast Asia | PP Block Copolymer | Offer Received | 1,070 | LC at sight |
| Indian Subcontinent | PP Homo Injection | Offer Given | 890-900 | TT |
| Middle East | PP Homo Injection | Offer Given | 900-920 | LC at sight |
| Southeast Asia | PP Homo Injection | Offer Received | 1,040 | LC at sight |
| Middle East | PP Homo Raffia | Offer Given | 880-900 | LC at sight |
Tags: Asia Pacific,China,English,NEA,PP,Weekly
Published on July 1, 2020 1:27 PM (GMT+8)
Last Updated on July 6, 2020 10:30 AM (GMT+8)
