Chinese players: PP market needs a short breath before fresh hike

The China PP market has been steadily firming up in the past one month, lifting import offers by more than $200/t and local prices by more than CNY1000/t ($155/t). However, market started to show some signs of stabilising this week as strong buyer resistance hurdle seller’s effort to bring prices higher. Some sellers are even trying to deplete cargoes on hand toward the end of the week.

A trader based in Beijing commented, “Most of our woven bag and film packaging customers has already purchased sufficient cargoes. Yet, we see end product demand is still very healthy, which means that they might need to come back for another round of replenishment in April, before ChinaPlast. Therefore, we think market just needs a break from the current firming trend to remain stable in the near term.”

Another trader from Shanghai offered Saudi homo-PP at $1040-1050/t CFR China, LC 60 days term added, “Import offers have not changed this week since market is in a tug-of-war between tight supply and stiff buyer resistance. However, we are not expecting any price reduction so soon as healthy demand in India market might limit export quantity from a major producer in this country. We think buyers need to catch a breath to accept current level before seller can implement further hike.”

In another news, Sinopec has announced April prices to spot domestic market with only CNY50/t ($8/t) firmer for LLDPE film cargoes while homo-PP remains unchanged.

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