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Import homo-PP prices in China are facing downward pressure from more competitive domestic prices and weakening import prices in Southeast Asia. The fact that import homo-PP prices in Southeast Asia have been standing above the prevailing import prices to China for the past several weeks has helped encourage sellers to take a firmer stance on their prices to the Chinese market, while a number of Chinese traders have been actively looking to re-export their stocks to Southeast Asia and other global markets. However, these traders comment that they are having an increasingly difficult time concluding re-export deals to Southeast Asia as prices are beginning to soften in the region in the face of persistently sluggish demand.

Source: ChemOrbis Price Wizard

Click here for a graph comparing import homo-PP prices in China and SEA for the past 12 weeks

According to data from ChemOrbis Price Index, import homo-PP prices on a CFR China basis have been steady for the past three weeks, with sellers saying that they are unwilling to reduce their prices as overseas producers are operating below their theoretical production costs even at the upper end of the overall range. Domestic homo-PP prices inside China have also held mostly steady over the past three weeks, although distributors reduced their prices by around CNY100-200/ton ($15-31/ton) last week. At the same time several domestic producers have adjusted their pricing policy such that they are prepared to give retroactive discounts to their customers, suggesting that domestic homo-PP prices will move lower over the near term. Domestic prices are currently trading with a discount of around $105-115/ton when compared with the prevailing import homo-PP price range.

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In Southeast Asia, import homo-PP prices on a CIF SEA, cash equivalent basis decreased $40-50/ton over the past week as sellers conceded to some price reductions in hopes of speeding up their sales in the face of sluggish demand. A Southeast Asian producer concluded some deals at prices $20-40/ton below their initial May price levels, which were announced with rollovers earlier this month. A Middle Eastern producer cut their May prices by $30-40/ton from their mid-April price levels owing to poor demand for import cargoes. Prices inside the region’s local markets were mostly stable over the past week, although offers from distributors have been reported at prices as much as $60-90/ton below the producer price level.