Local PP prices propelled up by tight supplies in China
Sept. 19, 2018
After a month-long stable to softer trend, the sentiment in China’s local homo-PP market has gained strength since last week mainly due to tight supplies. The recent gains have recently pushed the weekly average of local homo-PP prices to a five-week high, data from ChemOrbis Price Index suggest
Local prices for homo-PP raffia have increased by more than CNY100/ton ($15/ton) so far, mostly erasing the losses recorded throughout August.
Several other factors including higher futures prices as well as improving buying sentiment ahead of the week-long National Day holiday to take place in early October were also cited as other supportive factors.
A few traders opined, “Local PP prices were firmer for the second week in a row due to tight supplies as well as stronger futures prices. Local PP supplies are currently tight as some producers are having turnarounds at their plants. The overall operating rates are also low. Plus, there are some replenishment activities ahead of the approaching National Day holiday.”
Meanwhile, the ongoing rally in spot propylene prices in Asia is expected to support the sellers over the near term. The weekly average of spot propylene prices in Asia has also reached their highest levels in approximately 4 years, according to data from ChemOrbis Price Wizard.