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China’s Zhongjing Petrochemical once again steps back on export PP offers as trading sentiment slumps at home ahead of the long holiday while key contracts on the Dalian Commodity Exchange extended the weakening trend.

The latest offers from the producer and changes from the previous offers are as follows:

The most traded PP contract for January 2024 delivery on the Dalian Commodity Exchange opens the week with a CNY80/ton reduction as traders adopt a cautious stance to evaluate the impact of the property market turmoil on the demand outlook. PP futures have fallen for four consecutive sessions, totalling the losses to CNY278/ton ($38/ton) compared to last Tuesday.  

“Besides, we think the producer would like to secure more orders before the National Day holiday to ease the potential inventory pressure in October. There might be room for negotiations,” said, a Southeast Asian buyer.

Background:

Fujian Zhongjing Petrochemical is a subsidiary of China Soft Packaging Group Holdings Limited – a leading BOPP packaging products manufacturer in China. The company ventured into the upstream sector by building its first PP plant in 2012 and has been actively planning to expand the capacity since then.

Existing plants include two PP lines with a nameplate capacity of 1 million tons/year and a 750,000 tons/year propane dehydrogenation (PDH) unit based in Fujian, China. 

In 2018, the company signed a contract to use LyondellBasell’s 5th Generation Spheripol technology to build a new PP line with an estimated annual output of 1.2 million tons/year. The new plant is scheduled to come online between late 2022 to early 2023. 

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