PPBC outshines PPH in China amid better demand

A stable-to-firmer trend has prevailed across China’s PP markets since the second half of March, thanks to high costs and a lack of supply pressure amid the turnaround season. Amid the ongoing uptrend, the prices of PPBC inj. have undergone notably larger upward adjustments when compared to homo-PP raffia and inj., inside the country for around a month.

Local PPBC-PPH delta hits highest since July 2023

As for the week ending on May 27, the overall ranges for local prices were assessed CNY100/ton ($14/ton) higher from the previous week at CNY7600-7850/ton ($931-962/ton without VAT) for homo-PP raffia and inj. and CNY200/ton ($28/ton) higher at CNY8000-8200/ton ($980-1005/ton without VAT) for PPBC inj., all on an ex-warehouse China, cash including VAT basis.

According to weekly average data obtained from ChemOrbis Price Index, homo-PP raffia and inj. prices have risen by roughly 2%, while PPBC inj. has posted a larger cumulative gain of more than 4% during the past month. The data also suggest a gap of $52/ton between the two grades, indicating the highest figure since the end of July 2023.



Import gap sees twofold increase from beginning of 2024

Even though the development inside the country is not as obvious as that in the import market, PPBC inj. prices have also outperformed homo-PP inj. prices, with sellers applying larger increases for the former.

The latest import range for homo-PP raffia and inj. and PPBC inj. offers was both assessed stable from a week earlier at $910-990/ton and $940-1020/ton, respectively, on CIF China, cash basis. This was followed by $10-20/ton increases for the former and $20-30/ton hikes for the latter in the previous week.

ChemOrbis Price Index shows PPBC inj. was trading $30/ton above homo-PP raffia and inj., suggesting a twofold increase in the delta between the two grades when compared to the beginning of the year.

Overall demand picture remains bleak, but relatively bright for PPBC

Indeed, an overall demand weakness has continued to persist across polymer markets, casting a shadow over the trading environment. However, the key stimulus for the current development in the PP markets mainly points to strong buying power for PPBC, with the rise in electric vehicles encouraging more demand for this grade.

A trader commented, “Buyers keep buying minimal volumes for replenishment purposes, but demand has signaled marginal improvement. PPBC sees robust demand thanks to the expanding electric vehicle sector, while buying enthusiasm from consumer film packaging applications is healthy.”

Besides, a reduction in supply due to maintenance turnarounds and favorable economic policies underpinned sentiment across PP markets and provided more support for PPBC prices to trend higher, along with favorable demand.