Export PP offers from China remain firm amidst stabilized local market and weaker US dollar

Chinese producers have maintained export PP offers at stable to slightly firmer levels this week, driven by a more stabilized local market and a depreciating US dollar. Despite these factors, the market's overall sentiment remains cautious.

The latest price range and changes week-on-week are as follows:

In the past week, demand for prompt delivery cargo within China has shown signs of lethargy, with buyers focusing on post-National Day deliveries at discounted rates. This forward-selling strategy, while alleviating some pricing pressure, does little to address the immediate warehousing challenges faced by sellers. However, the willingness of buyers to commit to future deliveries has emboldened sellers to uphold their firm pricing.

A producer commented, “With the US dollar depreciating by approximately 1.5% against the Yuan since the start of the month, it’s imperative to adjust offers to reflect the currency exchange impact.”

Yet, despite lower shipping costs from China, these adjusted offers have failed to resonate with Asian buyers. Current buying interest in Southeast Asia remains tepid, with acceptable price ranges capped at $940-970/ton CIF. The substantial gap between buying ideas and Chinese sellers' expectations has resulted in a pronounced transaction lull in this region.

Looking ahead, Chinese suppliers are cautiously optimistic, believing that the PP market will stabilize further and that overseas buyers will gradually return for replenishment. However, the persistence of wide price differentials and weak immediate demand signals that this recovery may face significant hurdles.

Written by: Kat Yun Yun

Edited by: Rochelle Nguyen