Price List: Zhongjing Petrochemical continues to revise export PP offers downward

Zhongjing Petrochemical opened export offers on the first trading day of the week with a $5 reduction on all available PP grades except for PPRC, which sees a $10 decrease from the previous week as the overall demand condition remains soft. 

The depreciation of the Yuan against the US dollar allows the producer to make minor cuts on the offers while the overseas market is on a tug-of-war to regain stabilization following a prolonged period of downswing. According to Southeast Asian market participants, the latest price cuts are rather symbolic than actual effort in attracting sales.

“Because for Indonesian buyers, import homo-PP must be below $900/ton based on CIF terms in order to attract deals. The producer’s offers based on FOB China are even higher than local materials offered based on free delivery (FD) term,” said, an Indonesian buyer.

Nevertheless, the producer might be targeting the South Asian market, where the acceptance seems slightly better than in Southeast Asia. 

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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