PP prices begin the week on a bearish note in Asia

PP prices begin the week on a bearish note in Asia
In Asia, PP prices began the week with decreases as domestic sellers in China, Indonesia and Vietnam cut their prices in response to poor demand and softening propylene feedstock costs. Sellers complained that their price cuts were insufficient to revive demand as buyers are generally expecting further price declines in the days ahead. Converters added that demand for their end products has been unsatisfactory recently and that they are generally operating with sufficient stock levels to cover their immediate needs.

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Inside China, a major domestic producer began the week by announcing decreases of CNY200-250/ton ($31-38/ton) for homo-PP and CNY350/ton ($54/ton) for PP block copolymer, citing lackluster demand and falling propylene feedstock prices as the main reasons for their price reduction. A distributor commented that news of the producer’s price cuts has further dampened buying interest, saying that they are willing to negotiate on their prices with buyers placing firm bids. A converter manufacturing woven bags said that they are only purchasing small amounts of material from the local market these days as they anticipate further price decreases in the days ahead. The converter added that they find local prices to be more attractive than import prices at the present. When taking customs duties as well as an estimated $30/ton for clearing and handling charges into account, domestic PP prices are currently trading with a discount of approximately $90-110/ton when compared with the prevailing import prices, suggesting that import sellers will face additional downward pressure in the days ahead.

In Indonesia, domestic producers conceded to price reductions of $70-80/ton on their homo-PP prices at the start of this week, bringing their new price levels close to the prevailing offer levels from the distribution market, which had been trading with a discount of around $60-90/ton when compared with the producer price level for the past few weeks. Converters in Indonesia said that they are not planning to make any new purchases for the present even after these price reductions as demand for their end products has been disappointing recently and they still have some previously-purchased higher cost stocks to work with for the present.

In Vietnam, distributors reported reducing their offers for both domestic and locally-held import cargoes by $19-24/ton at the start of this week in the face of persistently sluggish demand from the local market. Converters within the region also reported receiving export offers for Vietnamese origins with decreases of $20/ton from the past week given weakening propylene feedstock costs and lower prices for locally-held cargoes.