China’s import PP prices edge higher amid better market fundamentals

The import PP markets in China have seen more active trading this week, following the holiday lull during the festive season. Though many sellers have maintained stable pricing, higher prices have emerged on the low end of the ranges due to a slight improvement in market fundamentals and a positive effect from Beijing’s macroeconomic policies.

Marginal hikes for ME origins

At the time of writing, sellers have applied increases of $10/ton for Middle Eastern PPBC injection, while homo-PP raffia and injection offers have witnessed rollovers to $10/ton hikes. This has resulted in marginal upturns in the overall import ranges for both grades.

The recent upward revisions could be attributed to limited allocation from the region, with a source saying, “There have been fewer Middle Eastern offers recently.” He further explained, “The availability of Middle Eastern cargoes reduced in China because sellers prefer to allocate to India and the Southeast Asia markets, where prices are more favorable.”

Slightly better market conditions

Alongside a reduction in supply from the Middle East, a slight uptick in demand has also contributed to sellers’ renewed confidence. The upcoming Lunar New Year holiday, which will start around the end of this month and last until mid-February, has stirred some buying interest, with more buyers showing willingness to make price inquiries.

In addition, “Macroeconomic expectations have boosted market sentiment,” said a trader. To enhance domestic spending and foster economic growth, Beijing plans to issue a record 3 trillion yuan ($411 billion) in special treasury bonds this year while outlining its monetary and financial priorities for 2025. The World Bank has also revised China’s growth forecasts to 4.5% from the earlier prediction of 4.1%. These macroeconomic factors have buoyed optimism among market players.

Caution still around

However, players are skeptical about the sustainability of the recent upturn, as the overall demand remains weak. The prolonged Spring Festival has bolstered pre-holiday stocking activities, but buyers have kept their purchases tied to basic requirements. A trader added, “Need-based procurements persist, and converters mainly focus on destocking their inventory of finished goods.”

Meanwhile, with the holiday season approaching and a festive mood setting in, many players are stepping away from the markets for celebrations and family reunions, leading to expectations of weakening demand before the holiday. “Demand will become weaker, as transactions slow down ahead of the Lunar New Year. We heard that many downstream factories will start their early holiday by next week, so the number of deals will decrease,” a converter commented.