Chinese homo-PP offers fell below $1100/ton threshold in SEA

As domestic inventories in China continue to build up in a faster rate than the recovery in demand, Chinese producers are stepping up effort to alleviate sales pressure in local ground by exploiting the export market at competitive prices.

In fact, export offers from a Ningxia based PP producer are reported at $1050/ton FOB China, LC AS term, which could be translated in to $1070/ton CIF Vietnam with the same payment term. A Chinese supplier commented, “Supply in local China market remains high and we might need to export additional cargoes in the near term. We hope to attract some buying interest with our offers since demand in Vietnam has been declining recently.”

This offer has formed the new lower end of the overall price range in Vietnam, which is expected to extend the downward pressure on other dutiable origins. Hope for stabilising trend seems fading at the moment. A trader commented, “It is a little slow in local ground, from which were are cutting domestic prices this week. With the new low by non-dutiable Chinese cargoes, we are not very confident that market is stabilising, in contrast, more discount might emerge in the near term.”  

Indonesian buyers are also receiving similar export offers from the Chinese producer and buyers here are very unpleasant with such abrupt development. A buyer commented, “We were shock. We did not expect import homo-PP prices to slip below the $1100/ton threshold this week. We plan to talk to the supplier to make a small purchases.”

Import homo-PP to Southeast Asia is currently reported at $1060-1280/ton CIF, LC AS term.