PP mostly stable in China amid softer futures, limited supplies
Oct. 22, 2018
In China, after a strong start to post-holiday period, the PP market tracked a largely stable trend during this week.
In the local market, prices for homo-PP raffia mostly hovered around last week’s levels. PP futures on the Dalian Commodity Exchange recorded a weekly decrease of CNY262/ton ($38/ton) as of October 18. A few traders opined, “Futures prices have retreated recently while local PP supplies have remained limited. The market may face a slight downwards correction as prices surged too much after the holiday.”
In the import market, the overall range for homo-PP raffia was reported at $1250-1295/ton CIF China, cash. The low end edged up by $5/ton from last week while the high end remained unchanged. A trader commented, “PP prices are mostly stable this week. However, the weakening in futures prices may cause a correction in the market in the days ahead.” An Indian producer lifted its raffia offers by $20/ton from last month to $1250/ton CIF while a Thai producer elected to keep its raffia offer stable on the week. Meanwhile, a done deal for Vietnamese raffia was reported at $1325-1330/ton CIF, yet this was not included in the price index.
Chinese PP players mostly concur that prices may undergo slight correction in the days ahead so long as the softening in futures prices continues. Limited supplies and four-year high spot propylene prices may continue to support the market while the state of demand remains as a factor to watch as China’s yuan has recently slumped to a 22-month low versus the US dollar.