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Zhongjing Petrochemical has reportedly stepped back on export offers by $15/ton on all available PP cargoes compared to late last week as the local demand failed to pick up while the strengthening US dollar makes it more expensive for overseas customers to purchase import parcels.

The latest offers from the producer and changes from the previous offers are as follows:

The domestic spot market in China is now facing tremendous challenges in restoring the pre-Shanghai lockdown trading condition as part of the city and Beijing are still battling the recent flare-up of infection cases. Yet, local production outputs started to revive. According to data from the National Bureau of Statistics, China’s PP production stood at 2,510,800 tons in May, up 4.6% from April. 

Last week alone, Zhongjing offered two rounds of price cuts, totalling $50/ton, yet, the rising shipping costs as a result of the strong crude oil prices erode the attractiveness of the cargo.

Background:

Fujian Zhongjing Petrochemical is a subsidiary of China Soft Packaging Group Holdings Limited – a leading BOPP packaging products manufacturer in China. The company ventured into the upstream sector by building its first PP plant in 2012 and has been actively planning to expand the capacity since then.

Existing plants include two PP lines with a nameplate capacity of 1 million tons/year and a 750,000 tons/year propane dehydrogenation (PDH) unit based in Fujian, China. 

In 2018, the company signed a contract to use LyondellBasell’s 5th Generation Spheripol technology to build a new PP line with an estimated annual output of 1.2 million tons/year. The new plant is scheduled to come online between late 2022 to early 2023. 

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