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For the third time since returning from the Lunar New Year holiday, China’s Zhongjing Petrochemical reduces export PP offers as local demand fails to pick up as strongly as the market initially expected. 

Compared to the first day after the Spring break, offers from the maker have fallen about $40/ton.

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

Trading activities in the domestic China market remain dwindling even though the government has lifted most of the COVID-19-related restrictions. Manufacturers in the country are gradually coming back but might need time to restore the operating rates since export orders to the US and EU have not picked up.

“Besides Zhongjing, we also receive more offers from Chinese suppliers. The emergence of these competitive cargoes is likely to anchor the current uptrend in Southeast Asia,” said, an Indonesian customer. 

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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