Chinese suppliers continued to trim export offers as weak local sentiment weighed

Chinese polypropylene (PP) suppliers have announced fresh export offers with additional reductions this week, reflecting the dwindling trading sentiment on the domestic front. However, it appears that these makers are attempting to limit the extent of the fresh cuts, especially among cargoes priced at the lower end of the overall range given the already squeezed margins.

The latest overall export offers and changes from the previous price announcement are as follows: 

The persistent depreciation in local sentiment has forced Chinese exporters to make difficult choices. Even with a stronger Yuan against the US dollar, holding prices stable has become a challenge, let alone introducing any increases. These constant price adjustments underscore suppliers' efforts to balance maintaining margins with the need to respond to subdued demand.

A representative from a major producer remarked, “We are willing to go as low as $940 per ton FOB China for large-volume purchases. With both softer price and shipping costs, we believe our offers are more appealing to Asian buyers now than last month.”

The latest figures show a significant drop in ocean freight rates from Ningbo Port, China. Shipping costs have fallen by 9.7% to Ho Chi Minh, Vietnam, 12.7% to Malaysia, 13.8% to Jakarta, Indonesia, and a striking 39.7% to India compared to the previous week. This reduction in shipping costs is expected to open up export opportunity windows for Chinese sellers.

In the meantime, the supply scenario in China is evolving rapidly. The restart of several local plants following maintenance shutdowns is leading to a swift recovery in PP supply. This increase in supply, combined with the ongoing weak demand, could exert additional downward pressure on both local and export markets if demand does not improve significantly.   

Written by: Kat Yun Yun

Edited by: Rochelle Nguyen