China’s import PP prices see first decline in months despite freight rally, SEA also falters

Import homo-PP prices in China have followed a stable to firm trend since early January, driven by rising costs and reduced supply from key sources, particularly during the heavy Q2 turnaround season. Recently, rallying freight costs have also supported high offers for imports. However, the market has now seen its first decline in several months due to growing resistance from converters and ample local supplies. Additionally, high price levels in Southeast Asia have faltered due to a lack of buying interest.

CIF China PPH softens from 16-month high

During the week ending on June 21, suppliers of Middle Eastern cargoes applied $20/ton decreases on their homo-PP raffia and inj. offers which were quoted at $910-930/ton CIF China, cash. This dampened the low end of the import range and dragged the weekly average level down from its 16-month highs, ChemOrbis Price Index shows.

CIF SEA stabilizes at lowest level in 5 weeks

Southeast Asia’s import homo-PP raffia and inj. market managed to halt the previous week’s decrease, with the weekly average of prices hovering around its lowest level since mid-May, according to ChemOrbis data.

The latest range for all origins was assessed at $975-1050/ton CIF Southeast Asia, cash. Within the range, Middle Eastern origins remained unchanged at $1010-1050/ton on the same terms.



Buyers’ resistance adds to sluggish demand

Depressed demand amid the off-season has come as a game changer in China’s import homo-PP raffia and inj. market, while the same factor has also impacted the trading atmosphere in Southeast Asia. Additionally, hot weather in China has slowed down operations at downstream factories, reducing demand for PP materials.

A Chinese trader opined, “Buying enthusiasm is constrained by limited order entry and poor profit recovery given the off-peak season. This demand drag affects the market trend.” Meanwhile, weak buying appetite in Southeast Asia, with converters showing a low willingness to risk delayed cargoes, worked against cost support. There was a standoff between producers and converters in the region, according to market participants.

Contributing to the present decline in demand was buyers’ reluctance and resistance to high-priced shipments. “Both homopolymer and copolymer offers were stable during the week. Converters have continued to resist higher levels, although they understand production costs and freight rates have increased. Container freight costs have jumped threefold, making it impossible for producers to ship reasonable volumes to buyers,” a Singapore-based regional trader noted.

The same situation was also reported by sellers in China, with another trader saying, “Buying enthusiasm remains stagnant, and downstream factories are strongly resistant to high-priced raw materials.”

Shipping chaos: a story of costs & demand

The ocean shipping turmoil has continued to be a hot topic across Asian polymer businesses, with opposite impacts on the import homo-PP raffia and inj. markets.

On the one hand, it has lengthened lead times and caused delivery delays, leading to reduced demand for imported products. On the other hand, the issue has partly crimped import supply, while escalating freight rates have added to cost support, providing sellers with strong leverage to maintain their firm stance.

“While import sellers have tried to raise prices by $10-20/ton, we prefer to buy from the local market as the prices are almost the same as for international shipments and we don’t have to wait for the local PP,” a converter commented. Another converter based in Ho Chi Minh City opined, “Suppliers keep delaying shipping our orders due to the unavailability of containers. Therefore, we have shifted focus to the local market instead.”