Persistent supply-demand imbalance keeps China’s PP markets on downtrend

China’s PP market has remained under sustained downward pressure, with prices continuing to slide over the past months. The persistent downtrend has been fueled by a combination of sluggish demand, mounting inventory levels due to weak restocking activity, and bearish crude oil and Dalian futures prices. These factors have not only shaped recent market sentiment but are also expected to weigh heavily on the near-term outlook.

A trader summarized the current landscape, “Demand has yet to show meaningful improvement, with most purchases still made on a need-only basis. While several upstream units are under maintenance, offering limited supply-side support, the reality is that domestic inventories have substantially built up after the holiday. In addition, crude oil prices dropped sharply during the holiday break, eroding some cost support for PP.”

Weak supply-demand dynamics continue to dominate

Demand remains sluggish amid a weak macroeconomic backdrop and ongoing US-China trade tensions. Most buyers are taking a cautious stance, avoiding aggressive replenishment as end-user consumption remains low. Downstream orders have shown no signs of recovery, while the recent appreciation of the yuan has further dampened export competitiveness.

On the supply side, while maintenance shutdowns at several plants in the Middle East, South Korea, and China provided temporary relief, they were insufficient to offset the broader oversupply situation. A source from a domestic producer remarked, “Although the level of maintenance is relatively high, inventory has accumulated significantly post-holiday. This is continuing to pressure the market, as buyers remain hesitant and only restock to cover essential requirements. The overall picture is still bleak.”

Adding to the bearish outlook, global crude oil prices collapsed during the holiday, and Dalian PP futures have remained weak. “Oil prices dropped by 6% during the holiday, and the PP market was already on shaky ground before that,” said a trader. “Although the current price levels might lure some buyers back into the market, whether prices can stabilize depends largely on crude oil. With the possibility that oil is now entering a period of deeper decline, most players prefer to wait for clearer signals before making any significant move,” he added.

Imports still at a premium over local offers

Import PP prices have been on a steady decline since the second half of March. For the week ending May 9, homo-PP raffia and inj. grades were assessed stable to $20/ton lower on a weekly basis, while PPBC inj. saw rollovers to slight reductions of $10/ton. According to data from ChemOrbis Price Index, both grades fell to their lowest weekly averages in seven months.

In the meantime, domestic prices have followed a stable-to-softer trajectory since the Spring Festival. According to the latest weekly average data from ChemOrbis, local homo-PP raffia and inj. hovered near their lowest levels since late July 2023, while PPBC inj. dropped to its weakest point since January 2024.

Local prices for both PP grades have continued to trade with a discount against imports over the past few months, even though the gap narrowed to $11-15/ton. This highlighted the ongoing competitiveness of domestic materials versus imported PP, compounding challenges for import sellers.



Exports at multi-year lows, pressure builds in SE Asia

After falling for three straight weeks, China’s PP export prices remained mostly unchanged in the week ending May 9, partly due to the yuan’s appreciation. Export homo-PP raffia offers were assessed at $880–910/ton FOB, cash, with average levels not seen since mid-July 2023.

A trader based in Ningbo commented, “The appreciation of the yuan over the US dollar has weakened export competitiveness. Overseas buyers are less inclined to engage, and many of them are waiting on the sidelines or buying only minimal quantities.”

Meanwhile, Chinese-origin homo-PP raffia and injection offers have continued to pressure Southeast Asian markets. Offers as low as $915/ton CIF Vietnam have been reported, intensifying competition for regional suppliers.