Price List: China’s Zhongjing continues to step back on export PP offers

Zhongjing Petrochemical announces fresh export PP offers to overseas customers with additional reductions from the previous week as a result of the falling demand. The latest price list shows $5-10/ton reductions and sources started to speculate that the producer might not have much room for further reductions. 

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

Demand for import homo-PP in both Southeast Asia and South Asia has been diminishing over the past couple of weeks and several other suppliers have joined the wagon in cutting offers to smoothen the selling process.

“Our end-product demand has been weakening for many months and with the approaching Ramadan season, the outlook is not too bright. Our buy ideas for yarn and injection grades at the moment are below $1050/ton based on CIF terms,” a Vietnamese customer commented.

Meanwhile, the emergence of on-spec cargoes from Malaysia’s PrefChem also hurt market confidence.

On the other hand, Zhongjing Petrochemical and other PP producers are falling under rising cost pressure as both propane and propylene hit multi-month highs on supply tightness. 

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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