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Key Chinese PP producer - Zhongjing Petrochemical opened fresh export offers for PP at unchanged levels compared to the previous price announcement after achieving a satisfactory number of transactions in the local market late last week.  

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

The recent recovery of the Dalian Commodity Exchange fueled expectations among Chinese customers that the downswing that has taken place since the start of 2024 may have reached the bottom. The development lured buyers back to make fresh replenishments, although the price sensitivity remained in place.

"We managed to deplete a good number of cargoes; hence, inventory pressure is not substantial. However, the demand seemed to lack momentum, which would pose a hurdle to any potential rebound,” cautioned, a source close to Zhongjing Petrochemical. The prevailing sentiment is that the market might remain range-bound in the near term, with no clear support from real demand.

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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