PP lags behind PE during seasonal recovery in China

In China, PP and PE prices have followed opposite trends, with the latter outshining the former. Except for last week’s slight decreases in HDPE film, PE prices have witnessed noticeable increases since the onset of the high season of “Golden September – Silver October”, while PP sellers have continued to struggle to raise prices.

The overall trading atmosphere across the polyolefin markets remains subdued due to unfavorable macroeconomic conditions, weak performance of Dalian futures, and sliding energy values. These factors, combined with weaker supply-demand conditions when compared to PE, have further weighed on PP markets.

Diverse directions in PP, PE prices

For the week ending on September 13, the uphill movement resumed in PE markets. Overall import PE prices were assessed $10-40/ton higher from the previous week at $1090-1220/ton for LDPE film, $10/ton higher at $890-980/ton for HDPE film, and stable to $10/ton higher at $920-1020/ton for LLDPE film, all on a CIF China, cash basis.

On the other hand, PP prices resumed their downturn after the previous week’s slight gains, with import offers for all origins being stable to $10/ton lower week-over-week, at $860-930/ton for homo-PP raffia and inj. and $890-950/ton for PPBC inj., both on the same terms. Data from ChemOrbis Price Index suggest that the weekly average prices of these two PP grades have reached their lowest level since late January and February, respectively.



The same trend occurred in the domestic market, with PE prices showing marginal weekly increases of CNY30-90/ton ($4-13/ton) compared to drops of CNY50-100/ton ($7-14/ton) in PP markets.

PE enjoys stronger seasonal demand revival

While there are different opinions among players regarding seasonal demand, PE demand has shown a stronger recovery compared to PP, driven by increased requirements across several downstream sectors, including agriculture, retail, and pharmaceuticals.

The approaching Mid-Autumn Festival has also contributed to higher PE demand, as the holiday typically brings higher consumption of food and gift packaging. As a result, packaging factories have reportedly ramped up their purchases of raw materials to meet end-user demands.

A source from a producer noted, “There is strong demand from the agricultural sector, while retail food and pharmaceutical packaging applications remain robust.” A trader said, “Some buyers continue to replenish based on essential needs, but the holiday has spurred trading activities to some extent, with increased purchases from packaging converters.”

Insufficient demand, rising supply keep PP under pressure

Nonetheless, the peak season has yet to provide substantial support for PP markets, with demand still lagging behind expectations. “There has been no significant improvement in buying power, with most buyers making limited purchases rather than stocking up in preparation for the high season,” said a Zhejiang-based trader.

Additionally, increased supply from the Middle East has exerted further downward pressure on PP markets, pulling offers for this origin to the lower end of China’s import PP range. Within the country, players have also reported a notable increase in PP operating rates. The total polyolefin inventories were up by 30,000 tons from the previous week to stand at 755,000 tons as of September 13. “PP operating rates at Chinese plants have significantly rebounded from earlier levels,” a market player said.