Print

The domestic homo-PP market in China just endured an impressive hike. In just three weeks time, spot homo-PP yarn has surged CNY550-650/ton ($80-95/ton), sending latest price range to CNY9,750-10,050/ton ($1231-1265/ton without VAT), EXW China, cash equivalent as of 7 August 2018.

Spot homo-PP yarn in China has not reached the CNY10,000/ton benchmark since CommoPlast started tracking local index in 2016. However, the latest increases are heavily coated by the steep depreciation of the Chinese Yuan against the US dollars.

In fact, the weighted average exchange rate based on data from OFX Group suggested that the Chinese Yuan depreciated 6.7% against the US dollar since the beginning of June. For the same period, spot homo-PP yarn surged 7.3% with most of the hike is seen over the past four weeks. 

“Availability in the domestic spot market is not high due to lower local production rate and import arrival. We have to recover our costs and therefore, we are left with no choice but to implement the hike,” a trader said.

This week, a number of traders have either reduced the offered quantity to the spot ground or totally suspended offerings with the expectation of further hike in the coming days. “Good news is that BOPP customers have managed to transfer the costs to end product, which could signal better acceptance among buyers,” a seller commented.

The import market is riding the high tide, too, with major Saudi Arabia producer claimed sold-out allocation for both yarn and injection grade to China at $1240/ton CFR, LC AS term, up $20/ton week on week.

“This is not in line with the theoretical currency exchange rule, however, homo-PP yarn supply is tight and this is one the main reasons supporting import ground,” an international trader informed.