Price List: Zhongjing cuts PP export offers on falling local demand

China’s Zhongjing Petrochemical has resumed offering PP cargoes to the export market after being absent for two weeks. The new price list showed a $20/ton reduction on all available grades from the previous price list, reflecting the persistently weak demand at home and overseas. 

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

Domestic demand in China has been soft for several weeks as this market struggles to cope with the rising number of COVID-19 infection cases. Experts believed that the current outbreak wave might only reach a peak in February, which infuses an expectation that trading activities here might remain dwindling throughout January.

Meanwhile, Southeast Asian customers are unable to keep up with the firming trend over the past week. A source close to the producer confirmed the lack of transactions in this region as a result of the stiff resistance.

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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