Local homo-PP prices surge in China on rising demand for particular grades

Local PP producers in China have started the week with significant hikes on the back of rising demand for some particular grades, including fibre and non-woven, which are used in the manufacture of face masks. Supply for most homo-PP grades are reportedly tight.

According to a trader, domestic homo-PP fibre prices in China have witnessed unprecedented gains since late March to be currently hovering around CNY23,000/ton ex-warehouse, cash including VAT ($2886/ton without VAT).

“Demand for fibre has surged due to the large-scale production of face masks. Skyrocketing fibre prices have also pushed the raffia market higher,” commented the seller.

Traders reported that domestic homo-PP raffia prices have risen to as high as CNY9000/ton ex-warehouse, cash including VAT ($1129/ton without VAT). This level indicates a more than CNY2000/ton ($283/ton) increase on the week. Last week, the price range stood at CNY6300-6900/ton on similar terms ($788-863/ton without VAT).

“Local homo-PP raffia supplies are limited in the country as several PP producers have shifted their focus on other grades, including homo-PP non-woven and fibre, to meet rising demand from face masks manufacturers amid COVID-19,” commented a trader.

A distributor based in Shanghai said, “With the exception of converters from the medical equipment market, there are not many deals being concluded at higher prices, but sellers are nevertheless taking a firm stance based on stronger futures prices and reduced supply levels.”

PP futures on Dalian surge 5%

On the Dalian commodity Exchange, September PP futures settled CNY398/ton ($56/ton) or around 5% higher at CNY7164/ton ($900/ton without VAT) on Monday, April 13.

When compared to the settlement level on April 1, PP futures surged 21%.