Will re-export PP from China continue to find a home in SEA?
Although prices in China are now gaining ground and oversupply worries are fading, traders in China are still offering re-export cargoes to the Southeast Asian market. “Re-export business to Southeast Asia is still going on, but we are concerned that demand from Southeast Asian buyers may soften in the weeks ahead as the volume of re-exported goods from China will begin to lessen availability problems in the Southeast Asian region,” a Chinese trader stated. Another trader added, “Re-export activities to Southeast Asia for the past few weeks have helped sellers pare down their excess stocks, but we are concerned that Southeast Asia is nearing a saturation point and that future re-export deals may become more difficult.”
Chinese traders are currently offering re-export homo-PP cargoes at $1280-1300/ton FOB China, cash, which could potentially be offered to SEA at around $1300-1330/ton CIF. These prices would be within the current import offer range of $1260-1360/ton CIF SEA, indicating that while re-export deals from China remain feasible, prices for Chinese re-exports are no longer quite as attractive for Southeast Asian buyers as has been the case over the past few weeks.
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