Price List: Zhongjing Petrochemical lifted export PP offers on rising oil prices

Zhongjing Petrochemical on the first trading day of the week, introduces $20/ton hikes on all export PP offers as a kneejerk reaction to the 5% surge in crude oil prices. The latest rebound shows just how sensitive the market is to the slightest sign of a bullish development regardless of the real demand conditions.

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

According to the producer, the rising energy complex will elevate the trading sentiment on the Dalian Commodity Exchange, which in turn would support the local market. Meanwhile, overseas buyers have been portraying a lack of buying appetite even at the previously lower price levels.

Several Asian buyers find the rebound lacking support because Zhongjing Petrochemical is using LPG (propane) as the primary feed in their PP production. Contract propane price for April loading was announced late last week with a $165/ton reduction due to ample supply and weak demand.

“We are in no rush to make any new purchases. The market is too volatile, hence, we are not in the position to build stocks at such unattractive prices,” 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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