China PP prices extend losses despite start of peak season

China’s PP market extended its losses this week, as oversupply and weak downstream consumption outweighed firmer upstream costs. Despite the traditional “Golden September, Silver October” demand season now underway, players said the expected recovery in buying appetite has yet to materialize, keeping sentiment depressed.

Prices soften further from multi-year lows

Domestic PP prices in China recorded fresh declines early in the week, with sellers reportedly applying discounts of CNY50-150/ton ($7-21/ton) to secure deals. Import offers, though limited, were similarly adjusted down by $10-20/ton, while some Chinese exporters followed suit, slightly lowering FOB prices.

January PP futures on the Dalian Commodity Exchange dropped by CNY119/ton ($17/ton) from a week earlier, reinforcing bearish sentiment. "Prices fell as futures declined, driven by weak demand," said a trader handling local materials, who added, "Petrochemicals are starting to reduce their operating rates to try to stabilize the market."

Even as CFR China propylene climbed $10/ton to near four-month highs, the slight cost support was insufficient to offset persistent oversupply. “The planned commissioning of Ningbo Daxie’s second PP line will intensify competition and weigh further on prices,” said a source at a Chinese producer. While some suppliers, including Taiwanese producers, maintained steady offers due to lower operating rates, overall market confidence stayed fragile.

Peak season yet to deliver relief

Market players had been pinning hopes on stronger seasonal demand to support a rebound in September. But so far, converters report no visible pick-up in orders. “Oversupply pressure persists, and PP capacity keeps increasing, while both local and export demand show no improvement,” said an end-product manufacturer.

With supply growth still outstripping consumption, players expect the market to remain weak in the near term. As one trader summed up: “Golden September has started, but we are yet to see its impact. Prices are likely to stay under pressure until demand shows real signs of recovery.”