China’s import homo-PP dips below local market after months; export prices hit 2-year low

China’s PP market saw a notable shift last week, with import homo-PP raffia prices falling slightly below local levels for the first time since late 2024. Despite a modest recovery in the domestic market, China’s export prices extended their losses, reaching their lowest levels in more than two years due to ongoing global competition and muted demand.

Import market: Narrow downturn brings prices below locals

According to the weekly average data from ChemOrbis Price Index, import homo-PP raffia prices dipped by $5/ton week-on-week to reach $885/ton CIF China in the week ending July 25. In contrast, local homo-PP raffia prices in dollar terms (excluding VAT) edged up to around $890/ton, driven partly by firmer futures earlier in the week.

This slight shift broke a five-week-long parity between domestic and import markets. Before that, for nearly seven months, domestic PP prices had consistently hovered below imports, encouraging buyers to favor local supply. The recent adjustment marks the first time in months that imports have regained their usual discount, albeit a narrow one, over the domestic market.

A trader commented, “The small drop in imports finally put them below local prices, where they should ideally be. This could help revive interest in imports if the trend continues.” Another trader, however, commented, “Despite lower import prices, buyers continue to prioritize domestic materials, citing price competitiveness and faster lead times. We’re seeing fewer inquiries for imports.”

In the PP block copolymer (PPBC) injection segment, import prices have already been trending below local levels for the past two weeks, underscoring the broader pricing pressure on imported grades. According to the weekly average data obtained from ChemOrbis Price Index, both homo-PP raffia and PPBC injection grades reached their lowest levels since December 2023.

Export market: Prices sink to 2-year low

While the domestic market found temporary support from firmer Dalian Commodity Exchange futures, China’s export market remained under heavy strain, extending its losses to the third consecutive week. FOB prices for homo-PP raffia fell by another $5-10/ton in the week ending July 25, with the weekly average hitting $880/ton—marking the lowest level since July 2023, according to ChemOrbis data.

An exporter noted, “Exports are difficult now. There are lower-priced offers out there, and we’re losing orders.” In the meantime, some traders noted that although the yuan remained relatively stable, it failed to provide a decisive edge in price competitiveness.

Local market: Dalian support fades, prices steady this week

As of the week ending July 25, domestic homo-PP raffia and inj. prices posted marginal increases of CNY50/ton ($7/ton) after two weeks of stability, while PPBC inj. held steady for the fifth consecutive week—extending a stable-to-firm trend that began in early June, according to ChemOrbis Price Index.

The firm footing inside the country was mainly supported by a rally in September PP futures on the Dalian Commodity Exchange. Barring a minor drop on July 23, futures moved steadily higher throughout the week, with a cumulative increase of CNY130/ton ($18/ton). Traders attributed this to mounting expectations around China’s upcoming industrial policy agenda. However, actual demand remained cautious and limited to basic procurement, hindering larger hikes.

A Zhejiang-based trader said, “The recent increase is fueled by expectations that China will cut production capacity and soon release its work plan to stabilize growth in ten key industries. The MIIT’s push to restructure these sectors, optimize supply, and phase out outdated capacity further boosted sentiment across commodity markets. Still, demand remains weak due to sluggish downstream sectors. While some buyers are making inquiries, most remain cautious and continue to purchase only for immediate needs.”

Players reported that the earlier momentum from Dalian futures faded, with the market starting this week mostly on a stable note. “Last week’s local gains were tied to Dalian’s rise, but with futures retreating, prices have largely flattened again,” said a trader in Zhejiang.

Inventory and cost signals add to headwinds

While a wave of maintenance shutdowns offered temporary relief to supply pressure, the broader market remained oversupplied, with fresh capacities quickly replenishing any temporary gaps. According to ChemOrbis Supply Wizard, China added 4.05 million tons/year of PP capacity in the first half of 2025, with another 4.1 million tons/year expected to come online in the second half, highlighting the potential for a deepening supply glut.

Ample domestic inventories at two major producers, remaining above the 700,000-ton threshold during the month, further underscored the fragility in demand and the persistent mismatch between supply and consumption.

Additionally, falling crude oil and spot propylene prices, which have followed a downtrend in the past weeks, have weakened cost support and reinforced the bearish undertone.