Despite firmer import offers, demand for homo-PP in China remains strong

Returning from the Mid-Autumn Festival, Chinese buyers reported seeing $10-15/ton hike in import homo-PP offers for both dutiable and non-dutiable cargoes from last week. Instead of the usual behavior of resisting, this time, the acceptance is high and purchasing interest holds very strong.

A regional trader, who sold more than 10,000 tons of Vietnamese homo-PP to China last week, reportedly sold additional 1000 tons of the same cargoes today at $1260/ton for yarn and $1270/ton for injection grade, all based on CFR China, LC AS. The latest deals indicated approximately $10/ton increased week-on-week. 

“Demand is very high. Supply might reduce significantly after this round of pre-holiday replenishment,” a source close to the trader added.

Meanwhile, Indian homo-PP yarn sees deals for 600 tons at $15/ton higher than last week, at $1240/ton CFR China term. “We add $10/ton to second-tier buyers and there is still some interest there,” a trader purchased the cargoes informed. 

Saudi Arabia materials are also moving in the same direction, however, the dealt quantity has not been confirmed at the time this report is published.

Looking at the current demand condition, suppliers could have lifted offers in a much higher range, and yet decided to stick to a small hike. Sources speculated that overseas sellers would rather push out larger quantity after months of stagnant demand than to focus on too high prices that might slow sales down. 

Buyers might continue sourcing more cargoes in the coming days to meet the production requirement during and after the National Day holiday. However, it remains cloudy on the post-holiday market outlook given the already aggressive buying activities now.