China’s local PP market retreats to early November levels
In China, local PP prices retreated back to early November levels as an extended rising trend from late April to early December lost speed as per the pricing service of ChemOrbis. Limited demand in the final month ahead of the Chinese New Year holidays was cited as the reason behind softer local PP prices. In addition, spot propylene prices on an FOB Korea basis declined by $25/ton at the beginning of the week due to weaker demand as Chinese buyers elected to purchase local cargoes at competitive levels instead of imports.
According to data from ChemOrbis Price Index, domestic homo-PP prices on an ex-warehouse China basis have declined by over $60/ton since the first week of December, when prices reached their peak. Locally-held PP prices posted decreases between CNY50-350/ton ($8-58/ton) week over week.
A distributor in Xiamen reported receiving local PP offers with decreases of CNY100/ton ($16/ton) from his supplier this week. He added, “We are keeping our prices steady for now, but we may concede to some discounts given thin buying interest. Buyers are staying sidelined in anticipation of further softening towards the end of the year.”
Another distributor in Ningbo added, “We are unwilling to concede to large discounts due to high replenishment costs. Demand is weak as buyers are limiting their purchases to a needs only basis and trading activities are likely to slow down further in the upcoming weeks as players will be leaving the market for holidays in the middle of January.”
According to ChemOrbis, after observing the recent softening in the local market, buyers are not rushing to make new purchases due to their anticipations of seeing further decreases in the upcoming days. A converter reported, “Distributors lowered their prices in line with local producers’ price cuts. We think that the outlook is soft for the short term.” Another converter commented, “We received lower offers from the local market. Import prices are stable to softer as some traders agreed to give discounts in line with softer local prices. We are planning to wait for now as we expect prices to decline further in the short term.”