Delta between PP prices narrows in SEA and China
According to a graphical analysis on ChemOrbis Price Wizard, PP prices on a CFR Southeast Asia basis carried a large premium over China’s import PP market during the March-June period. It can be seen on the above graph that the delta between the two PP markets hit record high levels of $125-135/ton within the course of this term.
Following the start of the recent upward trend, import PP prices on a CFR China basis witnessed sharper increases when compared to CFR SEA based prices. This was mainly due to the fact that the Chinese market was notably supported by significant gains on futures PP prices on the Dalian Commodity Exchange. Meanwhile, prices in Southeast Asia registered relatively smaller increases during this upturn as the prevailing market levels were already high.
The firming PP trend in China faltered last week in response to notable decreases in the futures market while supply-demand concerns gained more prominence. This was followed by the Southeast Asian PP market which tracked a mostly steady path over the past week. As a result of the recent stabilization in PP prices, the gap between the two markets narrowed back to its traditional levels.
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