China’s local homo-PP prices slide below imports
Last time the local market traded at a discount to imports was mid-June of 2019.
China’s local homo-PP market is currently trading about 5% below the import market, the discount widening from the slightly-below 4% in the previous week. A year-on-year comparison draws a sharp contrast. The data show that the local market traded at a 32% premium to import prices during the same period of 2020.
Ample domestic supply weighs on prices; sellers stay focused on exports
Market participants have reported a surplus of Chinese homopolymer PP cargoes putting downward pressure on local prices.
“Because of new PP capacities and lesser export orders for end products, the China market has no appetite for more cargoes, so prices are under downward pressure,” a source from a domestic producer explained.
PP inventory levels in China have continued to rise. A Chinese trader said: “Inventories are piling up. Both import and domestic prices are coming off, but the local market sees larger drops than imports. There is no major improvement on demand and the number of deals has been limited. Sellers prefer to focus more on exporting Chinese PP.”
Still, demand towards import PP has been reportedly weaker compared to locals since buyers prefer to procure their immediate needs from domestic suppliers who offer much more competitive prices.
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