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China’s Zhongjing Petrochemical decided to reduce export PP offers by $10-15/ton compared to the previous price announcement, reflecting the general downtrend observed across the Asian market.

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

Zhongjing’s cargoes remain unattractive in the Southeast Asian market at the time of this report. In Vietnam, buyers have secured South Korean homo-PP yarn at $850/ton based on CIF term in the previous week and offers above the $900/ton mark face stiff resistance.

Meanwhile, in Indonesia, non-dutiable cargoes have been transacted at $950/ton CIF term. 

“Chinese suppliers are losing out in Southeast Asia because of the firm futures and domestic spot market. However, the producer might attract buying interest from other regions,” added, a Vietnamese buyer.

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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