China Domestic PP Price Downtrend May Ease Post-Holiday

Polypropylene (PP) prices in China’s domestic market may slow down their downtrend post-Lunar New Year as downstream demand is expected to pick up.

But general market uncertainties will likely prevent prices from reversing direction.

Domestic prices of PP flat yarn (raffia) and PP injection in east China have shed Chinese yuan (CNY) 400-500/tonne ($63-79/tonne) from mid-January to CNY9,050-9,150/tonne and CNY9,100-9,250/tonne, respectively, on 14 February – the last day of trading before the Chinese markets took a full-week break for the Lunar New Year.

Prices of PP block copolymers over the same period decined by CNY350/tonne to CNY9,350-9,450/tonne, according to ICIS data.

Major suppliers started cutting their offers since 5 February to reduce their inventory and boost sales in view of tepid demand.

Some decided to suspend spot sales for 5-10 days to accumulate sufficient stocks to see them through the week-long Lunar New Year holiday on 15-21 February.

But the weakness in China’s domestic PP prices has not permeated the import market, where offers for late February-/March-loading cargoes have stayed firm since early January amid low inventory.