Pressure persists on China’s PP market after holidays
Despite the ongoing tightness of import offers as well as the shutdowns, which supported expectations for a possible price rebound in the period ahead of the holidays, the import PP market has remained under pressure from weak demand while buyers are gradually returning to their desks.
Import homo-PP raffia offers have been reported $20/ton softer on the low end from the pre-holiday levels at $1100-1170/ton CIF China, cash basis.
A Ningbo-based trader purchased Saudi and Indian raffia at $1130-1140$/ton and $1100/ton CIF, respectively.
A source from a South Korean producer offering PP block copolymer injection at $1200/ton CIF China/Hong Kong, cash basis, said, “Our offers indicate a slight softening from the pre-holiday levels as market has been quiet so far. We expect to see a stable to softer trend in the days ahead as demand for raffia and PP block copolymer is weak this year.”
In the local market, prices were mostly stable from the pre-holiday levels. However, they are looking for a direction in the midst of fluctuating futures as well as increasing inventories after the holiday.
January PP futures on the Dalian Commodity Exchange returned from holidays with a slight increase of CNY28/ton ($4/ton) on Monday, October 9 while they retreated by a total of CNY251/ton ($38/ton) on October 10-11. The recent volatility prevented the futures market from being an indicator for the near-term direction.
A few traders attributed stable prices to volatile futures while they concur that more time is needed in order to have a clear vision on the state of demand as buyers are not fully back to the market yet.
Another trader noted, “We expect demand will show a slight improvement in the remaining part of October due to replenishment activities to take place after the holiday. However, prices are still found too high by buyers and if futures won’t move back up, it will be hard for them to maintain these levels as sellers’ inventories are not considered low.”
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