Print

Domestic homo-PP yarn market in China surged to a fresh high this year by the week ending 21 September 2018, thanks to healthy pre-holiday replenishment activities while supply is tightened as a result of several plant issues in the country.

Domestic offers for yarn grade swing higher drastically by the beginning of September and recorded a total gain of more than $50/ton on an average to the range CNY9,950-10,550/ton including VAT, EXW China, cash equivalent or $1252-1328/ton without VAT.

Besides the fact that rising propylene costs that provides strong support from the upstream side, local availability for homo-PP is not very comfortable at the moment, sources said. 

Strict environmental control is biting into the coal availability at some areas, and as a result, Zhongtian Hechuang Co Ltd has to temporarily shut its 350,000 tons/year coal-based PP unit for a week to ten days, starting 14 September. 

Technical issues also forced Zhongjing Petrochemical and Fude (Ningbo) Energy & Chemical to shut down PP lines for a week. Both plants have combined PP capacity of 750,000 tons/year.

On the demand side, purchasing activities have been really strong over the past week as buyers return for pre-holiday replenishment. Couple of BOPP converters were not able to procure sufficient materials in the local ground, were forced to adjust operation rate. Meanwhile, other buyers are seeking nearby cargoes in the import market.

A regional trader claimed to have sold approximate 13,000 tons of Vietnamese homo-PP yarn to China this week, while Philippines cargoes sold around 4,000 tons. “We expect no less than 15,000 tons cargoes from South Korea, too. All of these parcels would arrive before or during the National Day holiday and therefore, we are a little concern on the post-holiday demand outlook,” a trader said.

Soaring local ground might keep import sentiment firm in the coming days, sources said. “Buyers might continue to procure additional quantity after returning from the Mid-Autumn Festival on 25 September. We expect some last minutes buying while remaining cautious about the outlook in October,” a trader commented.