Price List: Zhongjing steps back on export offers on stiff market resistance.

The continuous price hike Zhongjing Petrochemical introduced in the previous week inevitably faced stiff resistance from overseas buyers, particularly in Southeast Asia as other sources of supply emerged at more competitive pricing.

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

The latest price adjustment seems minor and might not be sufficient to support the maker in attracting deals overseas. However, it is understandable. Zhongjing Petrochemical is among the propane dehydrogenation (PDH) producers in Asia, who are facing rising upstream costs that erode operating margins. CommoPlast reported earlier that Saudi Aramco lifted the contract propane price for September loading to Asia by $80/ton, sending the latest price list to $550/ton FOB Saudi Arabia. 

“Not only the cost pressure is high, but we also carry manageable levels of inventories. The export market has not been favourable to Chinese sellers for months. Our focus in the near term would still be the domestic ground,” said, a source close to the producer.

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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