Downward correction continues in China’s local PP market
Having fluctuated since early September, PP futures on the Dalian Commodity Exchange retreated by $67/ton on a weekly basis as of September 19.
Additionally, the slowdown of demand ahead of the National Day holidays, which will take place in the first half of October, as well as the local producers’ increasing inventory levels have contributed the current sentiment.
A compounder commented, “Local prices have recently softened as they firmed up too much previously. The decline of futures prices, local producers’ higher supplies and weak demand are also other factors that pushed prices lower. Although our orders are stable so far, our profit margins are very narrow as costs are quite high.”
An agent of a Taiwanese producer also noted, “Demand for PP block copolymer is muted as buyers are sidelined ahead of the National Day Holiday. We think the direction of PP market is unclear for now; however, there has been a slight relief in the ongoing tightness of import PP supply for the past two weeks given lack of demand.”
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