Uptrend in China’s import PP market continues but cautious mood returns
Import homo-PP prices hover at 3-month high
As can be seen in the below graph created by ChemOrbis Price Wizard, the weekly average of import homo-PP raffia and inj. prices on CIF China basis has gained a total of $75/ton during its longest winning streak since the beginning of 2020 to currently stand at $870/ton.
As for PPBC inj., the weekly average of prices on CIF China basis has posted a cumulative gain of $47/ton within the same period to be currently reported at $927/ton.
Rising concerns about a resurgence of the disease
A fresh outbreak of the novel coronavirus in Beijing has caused lockdowns across some areas in China’s capital over the weekend. New restrictions were taken immediately for the prevention of the spread of the virus. They include banning outbound travel of people at high risk of exposure to COVID-19 and suspending some transportation services out of the city.
As of Tuesday, there are also reports that the outbreak has spread beyond Beijing, with the nearby provinces declaring new cases.
However, the local government’s rapid reaction to the new cluster has implied that there has been a controlled approach against the outbreak this time.
Buyers turn cautious after news
Demand in China has been reportedly improving since late April, when the country emerged from its coronavirus-related lockdowns after several months of strict measures.
However, a few traders reported that buyers have started this week with a more cautious stance following the news of a second-wave of coronavirus. This also influences the behavior of buyers across export outlets.
A trader reported that their offers for Middle East and India origin homo-PP raffia and inj. offers were stable to up by $10/ton from last week at $880-890/ton and $860/ton CIF China, cash, respectively.
“Import PP prices have posted relatively smaller gains recently when compared to the previous weeks. This is because of the impact of the news about the second-wave of coronavirus. However, the government’s quick response to the emergence of new cases shows that things are under control for now. Overseas suppliers are not under any sales pressure now and they are standing firm on their offers,” he said.
Will PP fibre be an exception again?
The unexpected need of facial masks, which has become vital during the coronavirus outbreak, boosted demand for PP fibre within the first quarter of the year while demand for other PP grades was mostly limited.
In order to meet this rising demand, PetroChina even constructed six new lines for the production of medicals masks with a total capacity of 600,000 per/day in March.
Now, there are some rumors in the market that PP fibre prices may see some gains again as demand for facial masks will increase again due to the current situation in Beijing. On the other hand, some players argue that PP fibre prices will not face a spike this time as China’s mask production has already seen an overcapacity.
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