Chinese Buyers Showed Resistance Toward Current Price Trend, Expect Sellers To Adjust Local PP Offers
- Local and import offers stride in-line as supported by two factors
- Market confidence propped up by the firmer futures prices but overall demand remain weak
- Market players expect adjustment on PP prices in contrast with the current trend
The majority of Chinese buyers showed resistance toward the current price trend, hence, they expect sellers to adjust local PP offers in the upcoming weeks, SSESSMENTS.COM was told. On the week commencing May 25, local and import PP offers captured in the same movement as supported by supply shortage, particularly for PP Homo Raffia in the domestic market and higher propylene prices. In the local market, offers for local PP Homo Injection and PP Homo Raffia cargoes via a trader increased by CNY100/ton ($14/ton) as compared to last Friday’s level. Similarly, another trader also decided to adjust up their offers for the same materials between CNY100-200/ton ($14-28/ton) on a weekly comparison, following the pricing strategy from the two major Chinese polyolefins producers. The trader further explained that the price increments made by the producers were driven by the limited availability of materials from the producers’ end. Additionally, local offers for PP Random Copolymer from a trader recorded up by CNY100/ton ($14/ton) as compared to last Friday’s level.
In the import market, a South Korean producer has announced June shipment offers to the China market. As compared to last week’s level, the offers for PP Homo Injection and PP Homo Raffia remain stable. While for PP Copolymer grades, the South Korean producer jacked up their offers by $10/ton as compared to the same period. To date, the producer has almost sold out all of their allocations for this month’s shipment but the prices are confidential. Meanwhile, according to SSESSMENTS.COM’s pricing database, the latest import PP Homo Raffia from Saudi to the China market is touching a new threshold level. As noted, the offers are available at $900/ton on LC at sight, CIF China Main Port basis.
By and large, demand for PP resins in the domestic market remains dull this week. Buying sentiment from the downstream market is still weak and most buyers showed resistance towards price increases. As such, the deal volumes were limited as well. Despite that, the overall market confidence is boosted owing to the firmer futures prices. Due to this, most suppliers were convinced to make an upward adjustment. On the supply side, supply for PP Homo Raffia from local producers is quite limited, SSESSMENTS.COM noted. On Wednesday, May 27, the inventory level of the two leading Chinese polyolefins producers stood at 735,000 tons, a reduction of 55,000 tons from Monday’s level (May 25).
Looking ahead, Chinese market players contacted by SSESSMENTS.COM believe that local PP prices would be on a downtrend in the near future on the back of several factors. First, import cargoes will arrive in China anytime soon. Second, buyers’ resistance towards high-end prices eventually will push sellers to adjust down their offers, or else buyers will continue adopting a wait-and-see stance.
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Local PP offers on cash, EXW China basis (including 13% VAT in CNY term and excluding VAT in USD term)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton |
|---|
| China | PP Homo Injection | Price List | 7,800-8,850 | 967-1,097 |
| China | PP Homo Injection | Offer Given | 7,700-7,750 | 954-961 |
| China | PP Homo Raffia | Price List | 7,600-7,800 | 942-967 |
| China | PP Homo Raffia | Offer Given | 7,700-7,750 | 954-961 |
| China | PP Random Copolymer Injection | Price List | 7,900-8,500 | 979-1,054 |
Import PP offers on LC at sight, CFR/CIF China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Delivery Term |
|---|
| South Korea | PP Block Copolymer | Offer Given | 890 | CFR |
| South Korea | PP Homo Injection | Offer Given | 860 | CFR |
| India | PP Homo Raffia | Offer Given | 820-830 | CIF |
| Saudi | PP Homo Raffia | Offer Received | 900 | CIF |
| South Korea | PP Homo Raffia | Offer Given | 860 | CFR |
| South Korea | PP Random Copolymer Blow | Offer Given | 990 | CFR |
Tags: Asia Pacific,China,English,NEA,PP,Weekly
Published on May 27, 2020 12:24 PM (GMT+8)
Last Updated on May 27, 2020 12:24 PM (GMT+8)
