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WeeklySSESSMENTS: China PP Prices Week Starting May 18


China’s New Regulation On Helmet Projected To Affect Demand For Particular PP Grades

  • Changes on local PP Homo Raffia were recorded on May 19
  • There were not many import offers
  • The fire at LG Chemical’s plant in Daesan affects supply 

SSESSMENTS.COM was told that China’s new regulation on helmet is projected to affect demand for particular PP grades. As for prices, at the beginning of the week, local PP Homo Raffia offers were stable compared to a week earlier. Offers for PP Homo Injection via a local trader decreased by CNY300/ton ($42/ton) compared to the same period. On Tuesday (May 19), offers for PP Homo Raffia increased between CNY100-200/ton ($14-28/ton) from Monday’s level owing to the uptrend in futures prices. For PP Random Copolymer Injection, local offers decreased between CNY100-200/ton ($14-28/ton) compared to last week. 

From the import market, there were not many offers surfaced. Market players informed that there are no offers from the Middle East yet and Middle Eastern suppliers did not inform when the offers will be announced. Meanwhile, a South Korean producer will announce June shipment offers next week. July shipment offers for PP Homo Raffia from an Indian petrochemical producer stood at $800/ton on LC at sight, CIF China main port basis. Compared to April shipment, the offers were adjusted up by $50/ton.

Overall demand for PP in China is weak. Most converters are running at 60-70% of the normal production rate and only procure on a need basis due to slow sales. Only mask manufacturers that run at full production rates. However, market players informed that PP demand from mask manufacturers also dropped lately. On the supply side, SSESSMENTS.COM was informed that supply for PP Homo Raffia from a local producer is limited. The inventory of two major polyolefins producers in the country stood at 800,000 tons on Wednesday (May 20), a decrease of 105,000 tons from Monday. Market talks have it that at the end of May, there will be 500,000-600,000 tons of import PP cargoes to arrive at China ports. In the production sector, Formosa Propylene Ningbo’s PP line with a capacity of 170,000 tons/year is used to produce PP Random Copolymer Injection while the other line with a capacity of 280,000 tons/year is producing PP Block Copolymer. The fire at LG Chemical’s plant in Daesan on May 19 only affects supply for metallocene PP.

Looking ahead, the majority of market players believe that PP prices will be stable to slightly increase on the back of firmer crude oil and propylene prices. Chances to see a decrease in PP prices are slim, the players opined to SSESSMENTS.COM. However, there are some market players that predict PP prices will decrease once import cargoes arrive in China at the end of the month. As China's new traffic policy that makes wearing helmets compulsory for electric scooter riders comes into effect on June 1, around 200 million pieces of helmets will be needed. Therefore, demand for PP Block Copolymer, especially the high impact, is expected to increase.

Click below to view related stories and content on the China PP market:

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PlantSSESSMENTS: China Daily PP Production Ratio

Local PP offers on cash, EXW China basis (including 13% VAT in CNY term and excluding VAT in USD term)

OriginProductTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaPP Homo InjectionPrice List7,800-7,900971-984
ChinaPP Homo RaffiaOffer Given7,500-7,700934-959
ChinaPP Homo RaffiaPrice List7,300-7,800909-971
ChinaPP Homo RaffiaSold7,600947
ChinaPP Random Copolymer InjectionPrice List8,400-8,5001,046-1,059

Import PP offers on LC at sight, CIF China Main Port basis

OriginProductTransaction TypeOffers (USD/ton)
TaiwanPP Block CopolymerOffer Received950-1,000
IndiaPP Homo RaffiaOffer Received800
IndiaPP Homo RaffiaPurchased800
USAPP Homo RaffiaOffer Received810

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

Published on May 20, 2020 12:46 PM (GMT+8)
Last Updated on May 20, 2020 3:35 PM (GMT+8)