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For the third consecutive week, Zhongjing Petrochemical steps back on the export PP offers, though the extent of the reductions remains minor.

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

A source close to the producer said due to thin profit margins and steady domestic ground, the company is unable to substantially reduce export offers even though overseas buyers have been reluctant to enter negotiations.

“South Korean cargoes are still more competitive at the moment. Vietnamese customers might become more interested in Chinese cargoes if the uptrend in this market persists, which we are a bit doubtful,” a Vietnamese trader said.

In fact, late last week, deals for South Korean homo-PP yarn and injection were recorded at $1010-1020/ton based on CIF Vietnam terms. Buyers here are conservative in accepting higher import prices. 

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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