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After having attempted to maintain a firm stance on export offers in the previous week Zhongjing Petrochemical continues to lower export PP offers amid the dwindling domestic demand.

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

Even after the price adjustments coupled with the depreciation of the Chinese Yuan against the US dollar and the plunging shipping costs, Zhongjing’s latest offers are still deemed uncompetitive in Southeast Asia at the moment. 

“The domestic market is weak, and we adjust the offers accordingly, however, we are unable to sell at loss. The upstream market is still firm. We expect the general supply to tighten in the near term as several plants have reduced operating rates due to the electricity issue,” a source close to the producer said. 

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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