China's import PP markets maintain uptrend under shadow of oil-driven losses in Dalian futures
Spot propylene prices on CFR China basis have stabilized at $870/ton recently, the highest level since late January 2020, ChemOrbis Price Wizard reveals.
A trader commented, “Import PP prices have continued to firm up this week on the heels of supply limitations and firm upstream markets. Several PP plant shutdowns in the US amid Hurricane Laura have also had an impact on the overall polyolefin markets in Asia.”
Demand wise, stronger yuan against the US dollar and the agricultural season stretching from September to October have been supportive for import cargoes, contributing to the ongoing uptrend.
However, the recent weakening in energy markets amid waning demand in line with the spike in COVID-19 cases around the world have led to a downtrend in futures prices.
During the past three trading sessions from September 4 to September 8, January PP futures on the Dalian Commodity Exchange posted a cumulative loss of CNY213/ton ($31/ton).
Homo-PP prices climb to almost one-year high
According to the weekly average data obtained from ChemOrbis Price Index, CIF China basis homo-PP raffia and inj. offers have gained $35/ton since the second half of August to be currently standing at $935/ton, the highest level in almost a year.
As for PPBC inj., ChemOrbis data also show that current prices have increased $25/ton in the past three weeks to reach their seven-month high of $1000/ton CIF China, cash.
Local PP prices feel pressure from lower Dalian futures
Unlike imports, the recent losses in Dalian futures have put pressure on the local PP markets recently.
PP prices have remained stable or edged down by CNY50/ton ($7/ton) since the beginning of the week.
Demand for local cargoes has slowed down a bit and inventory levels inside the country have increased as buyers have sidelined following the weakness of Dalian market, according to market players.
Meanwhile, traders reported that the two major local producers’ combined polyolefin inventory levels in China were standing at around 740,000 tons on September 7, up by 95,000 tons compared to Friday, September 4.
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