Chinese PP market turns south, shrugged off plant issues

This morning, Chinese traders abruptly adjusted their import homo-PP prices down as slower demand overshadowed the number of plant outage. The latest offers indicate some $20-30/t reduction compared to last week with even regular origin homo-PP broke below $800/t level.

A trader in Beijing commented, “The weakening of crude oil has negatively impacted the market sentiment, reducing the confidence level among traders about the near term outlook. Local material prices continue to decline, alongside with the depreciation of the Chinese Yuan have pushed buyers away from the import market.”

Many are complaining about weaker buying interest from local buyers as they have replenished some cargoes previously while traders are not willing to hold inventory ahead of the Chinese New Year holidays. A source in Xiamen said, “We do not expect any upward movement in the PP market despite the number of unplanned shutdown. It is very difficult to conclude deal these days and we expect local inventory to build up after the upcoming holidays.”

Some other sellers are actively searching for new export outlets in near-by Southeast Asia market given concern over slower local demand in 2016. One of the traders in Shanghai shared, “We see good prospect in Vietnam PP market in the year 2016, hence we plan to divert our attention to this market. We maintain conservative view regarding the outlook in the near term.”

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