Chinese traders: domestic PP demand falls short of expectations
“PP prices retreated a bit at the start of the week, but we still do not hear of many deals being concluded. Most converters seem to be consuming their stocks at a relatively sluggish pace and are therefore in no rush to secure new cargoes. Domestic capacity for homo-PP has risen considerably due to the start-ups of new coal based capacities and more plants are due to come on-line this year, which will maintain some downward pressure on PP prices. We are more bullish about PP copolymer prices as copolymer supplies are a bit tight,” a distributor based in Ningbo stated.
Another distributor added, “PP demand has not lived up to our expectations so far and this fact, along with sufficient supply levels stemming from new coal based capacities, has resulted in prices stepping back from the levels seen in the past week. We think that the price hikes seen last week were a bit speculative, so a step back from those levels may keep demand and supply more balanced.
A third distributor reported, “Local prices are stable at the start of the week, but we feel that prices may retreat a bit from last week’s highs as some fresh import cargoes are due to arrive at the ports later this month while demand from end users has not been as strong as we would have liked after the recent holidays.”
Domestic homo-PP injection and raffia prices currently stand at CNY8250-9000/ton ex-warehouse China, cash equivalent basis inc VAT ($1148-1252/ton without VAT).
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