Despite Positive Pricing Outlook, Buying Sentiment In China PP Market Will Be Uneasy To Follow Suit
- Import PP offers of various origins captured moving in the same trend
- Buying sentiment started to weaken
- Local and import PP prices predicted to shift further in the near term
Despite positive pricing outlook, market sources opined to SSESSMENTS.COM that the buying sentiment in China PP market will be uneasy to follow suit. On Monday, the local offers for PP Homo Raffia and PP Homo Injection were kept stable compared to last Friday’s level. Sources stated that the offers were kept stable as it was still the first trading day of the week, hence, there was only limited market news to guide the pricing decision. However, a decrease of CNY600/ton ($85/ton) from last Friday’s level was recorded for the offers of PP Homo Injection 1860E grades. On the following day, sources reported that the local offers for PP Homo Raffia decreased by CNY100/ton ($14/ton) on a weekly comparison while a trader reduced the offers for local PP Homo Raffia cargoes by CY100/ton ($14/ton) from Monday’s level. For local PP Homo Injection cargoes, a trader also reduced the offers between CNY200-400/ton ($28-56/ton) compared to the same period. From the import market, the offers for Saudi PP Homo Raffia increased by $30/ton on a weekly comparison, and an increment of $40/ton from a fortnight ago was recorded for import offers for PP Homo Raffia from India. Likewise, July shipment offers from a Malaysian polyolefins producer also increased between $60-80/ton from last month. Meanwhile, the offers for import Russian PP Homo Raffia and PP Homo Injection cargoes recorded at $860-870/ton on LC at sight, CIF China Main Port basis. Pertaining to the import offers, sources revealed that there were no deals concluded yet as the offers were deemed too high.
In the domestic market, the offers for PP Random Copolymer Injection captured at CNY8,200-8,600/ton ($1,158-1,215/ton) on cash, EXW China basis, and including 13% VAT. While from the import market, a Malaysian polyolefins producer announced July shipment offers for PP Block Copolymer and PP Random Copolymer Blow with an upward adjustment of between $60-80/ton on month-on-month comparison. Following the increases, SSESSMENTS.COM was informed that buyers were asking for lower prices as buying sentiment is rather weak. While for South Korean cargoes, deals for PP Block Copolymer and PP Random Copolymer Blow were achieved at $940/ton and $1,010/ton, respectively, on LC at sight, CIF China Main Port basis.
As most buyers have been doing the replenishment activity in the last two months, market sources reported to SSESSMENTS.COM that demand has started to slow down. Buying sentiment began to weaken and buyers are showing cold responses towards higher offers. On the supply side, the inventory level of the two leading Chinese polyolefins producers recorded at 755,000 tons as of Wednesday morning. Compared to Monday’s level, the inventory level decreased by 85,000 tons.
Looking ahead, market players expressed an opinion to SSESSMENTS.COM that there is a possibility for local and import PP prices to increase further in the near term as supported by the firm crude oil and monomer prices. However, it will be difficult for sellers to move cargoes out as buyers will most likely showing stiff resistance towards the high prices.
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 | Offer Given | 7,850-8,050 | 981-1,006 |
| China | PP Homo Injection | Price List | 7,900-8,400 | 987-1,050 |
| China | PP Homo Raffia | Offer Given | 7,650-8,000 | 956-1,000 |
| China | PP Homo Raffia | Price List | 7,700-8,000 | 962-1,000 |
| China | PP Random Copolymer Injection | Price List | 8,200-8,600 | 1,025-1,075 |
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 | Sold | 940 |
| Southeast Asia | PP Block Copolymer | Offer Given | 1,000 |
| Central Asia | PP Homo Injection | Offer Received | 860-870 |
| Southeast Asia | PP Homo Injection | Offer Given | 940 |
| Central Asia | PP Homo Raffia | Offer Received | 860-870 |
| Indian Subcontinent | PP Homo Raffia | Offer Given | 850 |
| Indian Subcontinent | PP Homo Raffia | Offer Received | 900 |
| Middle East | PP Homo Raffia | Offer Given | 810-830 |
| Middle East | PP Homo Raffia | Offer Received | 900 |
| Southeast Asia | PP Homo Raffia | Offer Given | 940 |
| Far East Asia | PP Random Copolymer Blow | Sold | 1,010 |
| Southeast Asia | PP Random Copolymer Blow | Offer Given | 1,060 |
Tags: Asia Pacific,China,English,NEA,PP,Weekly
Published on June 10, 2020 1:28 PM (GMT+8)
Last Updated on June 10, 2020 1:28 PM (GMT+8)
