Chinese homo-PP market move higher right after the Golden Week

The Chinese PP market extended the firming trend on the first trading day after the weeklong National Day holiday, which is much in line with the initial expectation. Compared to the pre-holiday week, import homo-PP yarn gains an average USD42/ton while local market surges USD35/ton, data from CommoPlast showed. An important point to note is that buying interest remains strong regardless of the fact that local prices have hit the all-time high this year, prompting fear that the peak might be very near.

In the import market, deals for Southeast Asian homo-PP yarn and injection cargoes are seen at $1300-1320/ton CFR China, LC 0-90 days term, $30-40/ton increased from the pre-holiday period. 

“We sold more than 1000 tons at the new prices,” a regional trader offering Vietnamese materials said while adding that such firmness might soon spread to the nearby Southeast Asia market.

In the local ground, limited availability is the main driver supporting the sharp hike in the homo-PP market. At the current spot offers, sources claimed that import non-dutiable cargoes priced at around $1300/ton mark are very competitive. 

“Converters need to make fresh buy due to low inventories on hand. With the existing supply condition, we expect the firming trend to sustain in the near term,” a trader commented.

Meanwhile, buyers started to express the concern that the market might be nearing the peak as it reaches an all-time high this year. “It is too risky to make large buy at the moment. We only source small quantity while waiting for previously purchased cargoes to arrive,” a buyer commented.

At the time this report is published, import homo-PP to China has reached $1250-1320/ton CFR, LC 0-90 days term. Local cargoes are traded in the range CNY10,700-10,900/ton ($1331-1356/ton without VAT), EXW China, cash equivalent.