China’s import homo-PP breaks below $800/ton: Market struggles despite pre-holiday buying

Ahead of China’s Golden Week holidays, import homo-PP raffia and injection prices broke below the psychologically significant $800/ton CIF threshold, reflecting the ongoing pressure in the market. Despite pre-holiday restocking activity and sellers’ efforts to revive interest with fresh discounts, the PP market has continued to face headwinds from poor downstream demand, a preference for more competitively priced local materials, and mounting supply concerns.

Import PP block copolymer inj. prices also saw further declines, narrowing the typical price gap with homo-PP grades. Overall, sentiment remains bearish as players anticipate a continuation of the downtrend after the holiday.

Prices continue to slide amid 2020 lows

The import homo-PP raffia and injection market saw fresh lows this week, with the low end of offers reported at $790/ton CIF China, cash—a decline of up to $20/ton from the previous week. This marked the first dip below $800/ton in more than five years, driven mainly by Middle Eastern suppliers cutting prices to secure sales before the holiday. Chinese export offers for homo-PP raffia and injection also dropped by $10-15/ton, mirroring the broader bearish tone.

Import PPBC inj. followed a similar path, with Mid-Eastern offers retreating by $10-20/ton at the lower end. This helped close the traditional gap between homo-PP and PPBC prices, which typically enjoy a premium. The shrinking spread sparked cautious optimism among some players, though most remained wary, citing subdued downstream demand and stiff competition from competitively-priced, domestically sourced PP. Local PP markets, while relatively stable, saw some slight downward adjustments in tandem with imports, according to market participants.

A trader remarked, “We are focusing on local materials now since they are more competitively priced.” Meanwhile, a source from a major Saudi producer confirmed October-shipment raffia offers were down by $50/ton month-on-month. “Cautious downstream procurement and the shift to local grades due to better pricing and improved quality are making it harder to place imported cargoes,” the source noted.

Bearish fundamentals persist despite pre-holiday restocking

Market fundamentals continue to lean bearish. Propylene feedstock prices showed some stability ahead of the holidays, but this was widely seen as a lull rather than a recovery, especially after Brent crude futures slipped by more than $2/bbl earlier in the week.

Inventory data from China’s two major polyolefin producers showed a combined stockpile of under 600,000 tons as of September 30, down 80,000 tons from the previous week, thanks to pre-holiday replenishments. Still, a quick 30,000-ton buildup earlier in the week reminded players that supply pressure remains intact.

“Prices are still facing downward pressure,” said one trader. “Export offers are also weak, and the holiday stockpiling is temporary. After the break, demand may soften again. Plus, new capacities are expected to come online soon, so the supply side may see more pressure,” the trader added.