China’s PP market makes a strong start in October
Oct. 10, 2018
Both local and import homo-PP prices in China have extended their gains into the post-National Day holiday period. Sellers have preserved their firm pricing policy on the back of higher futures prices, good demand coupled with lower-than-expected inventory levels. High spot propylene prices in Asia also continue to support the PP market.
China’s local homo-PP market has been standing on the firm side since the first half of September while the import homo-PP market responded to this firming in the week right before the holiday.
PP futures on the Dalian Commodity Exchange have increased by CNY519/ton ($75) as of October 9 when compared to the last trading day ahead of the week-long holiday. As for inventory levels, players have reported that the polyolefin inventories of two major producers were lower-than-expected.
A trader reported that their local raffia offers indicate a CNY200/ton ($29/ton) increase from late September and commented, “Two major producer’s inventory levels have increased during the holiday; but not as much as we expected . Plus, PP futures are quite bullish and demand is good as October is the high-season for PP applications.”
A Ningbo-based trader also reported that they raised their import raffia offers by $20/ton and noted, “Although PP prices are higher, market response is good. PP prices have opened the post-holiday period on a firm note given stronger futures prices, low inventory levels and the impact of the ongoing high-season.”
A seller also opined, “Two major producer’s inventory levels are not as high as expected and the market is strong amid the high-season. Although the ongoing trade war hampers buying interest, we expect PP prices to post further slight increases because of tight supplies and high propylene prices in Asia.”