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Weak local market pressure import homo-PP in China, but how much more can price goes down?Weak local market pressure import homo-PP in China, but how much more can price goes down? |
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A brief rebound in the domestic spot homo-PP market in China during the beginning of December has proved unsustainable. Prices have been resuming the downtrend over the past three weeks, shredding about CNY480/ton ($70/ton) on an average along the way. There have been some signs of stabilization by mid of this week, however, purchasing interest remains pretty disappointed.
With the steep reduction in local prices, the import market was not able to hold on to the initial firmness that many suppliers portrayed claiming lack of inventories pressure. Compare to the first week of December, the average import homo-PP yarn to China fell nearly $50/ton to the range $1050-1070/ton CFR China, LC 0 – 60 days term on 26 December.
The question is would import offers continue to fall in the near term?
Many Chinese buyers thought that prices might be stabilizing now that no sellers are willing to go below the $1050/ton threshold. The same thought was expressed two weeks ago, just before a Saudi producer sold cargoes directly to converters at $1000/ton CFR China term and brought up questions among market participants.
“We have more confidence this time mostly due to the belief that Middle Eastern suppliers have already depleted most of the inventories. Sales pressure significantly dropped. Having said so, the outlook in the first quarter of 2019 is rather cloudy, especially with the recent slump in crude oil prices,” a trader commented.
On the bright side, the short trading month of January might bring more good with it than market expected. Many converters planned to off for the Lunar New Year holidays until the Chap Goh Mei festival on 20 February, meaning that more stocks are needed during the off time.
Another trader commented, “We are on the watch out mode for the pre-Lunar New Year replenishment. The first and second week of January is crucial and we think this could support the market to regain some strength”. The trade managed to sell a small quantity of Indian homo-PP at $1050-1060/ton CFR China term.
Country
China
