China’s local PP prices stay below imports; boosting export competitiveness

China’s domestic homo-PP raffia and injection prices have remained under pressure since late January due to oversupply and sluggish demand recovery. The market hit a two-month low last week, according to ChemOrbis data, widening the gap between local and import prices. As a result, Chinese cargoes have become more competitive in both domestic and export markets, while overseas sellers struggle to maintain their edge.

Locals lose premium over imports

ChemOrbis Price Index suggests that China’s local homo-PP raffia and inj. prices lost their premium over imports in late November 2024 and traded with a discount of $3-15/ton until H2 January. After briefly regaining the typical premium post-Lunar New Year, domestic prices have once again fallen below import levels since mid-February, as tighter overseas supply has pushed import prices higher.

Meanwhile, a combination of slow demand revival, supply glut, and weak futures has weighed on local sellers’ pricing, widening the gap $11/ton. “Chinese buyers find domestic sourcing more attractive, which is pressuring import sellers,” commented a trader.



Chinese PP continues to offer competitive edge in SEA

ChemOrbis data also reveals a growing delta between China’s local homo-PP raffia and inj. prices and Southeast Asia’s import levels for Mid-Eastern origins. This has encouraged more Chinese sellers to target nearby Southeast Asian markets, where supply shortages from the Middle Eastern and regional producers have driven demand for competitive Chinese offers.

Regional players reported available offers for homo-PP raffia and inj. originating from China. In Vietnam, the offers stood at $930-970/ton CIF, cash, forming the low end of the previous week’s import range. A local trader noted, “Materials from Japan and Thailand are priced too high compared to Chinese offers, so it’s challenging to sell them.”

Chinese PPH attracts interest in India

In India, Chinese origin homo-PP offers also continued to offer a competitive edge against the Middle Eastern offers, which have been supported by reduced supplies amid Q1-Q2 turnarounds.

An Indian source said, “There’s definitely availability of Chinese origins sold through traders at $20-30/ton lower than the low end of the assessments of Middle East origins into India. There is good demand for Chinese raffia origins in a $940-960/ton CIF range. Availability is also not a big issue.”

Export activity likely to keep rising

The broader deltas with imports in Southeast Asia and India are likely to make China’s domestic market less appealing to local suppliers, prompting them to divert more homo-PP cargoes to these outlets for better netbacks. This shift is crucial to addressing China’s supply-demand imbalance, as local prices continue to widen discounts against imports.

China’s PP demand has slightly improved post-holiday but remains fragile. Some buyers are actively inquiring about offers, signaling a mild uptick in buying interest, yet purchases remain hand-to-mouth. This cautious stance suggests demand recovery may be limited during the typical high season from March to May, keeping domestic prices under pressure. A trader commented, “The potential for demand growth is limited, offering insufficient support to prices.”

Adding to weak demand is a growing supply glut, as China continues its transition to becoming a net exporter. According to ChemOrbis Production News Pro, China plans to add 6.2 million tons/year of PP capacity in 2025. The country has already commissioned four new plants totaling 1.8 million tons/year in the past two months, with further expansions focused on Q2 and late Q4.

Meanwhile, if global freight rates continue declining, this could create more arbitrage opportunities for Chinese suppliers, allowing them to ship more PP cargoes not only to Southeast Asia and India but also to distant markets like South America and Africa.