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Zhongjing Petrochemical commenced the new week with a strategic move, implementing a $5/ton increase in export PP offers compared to the previous week. This adjustment is attributed to the ongoing tight supply conditions, exacerbated by the delayed ramp-up of the plant's production capacity.

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

A source close to the producer emphasised, "Zhongjing Petrochemical is responding proactively to the prevailing market conditions. The $5/ton increase demonstrates the company’s dedication to adapting to the ongoing scarcity of materials while simultaneously tackling the outstanding backlog in local market deliveries."

The adjustments were prompt in response to the surge in PP futures and robust LPG futures.

Initial responses among Southeast Asian buyers are rather subdued. Higher export offers coupled with the surging shipping costs making it more expensive for overseas buyers to accept at the moment. 

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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China