Asian Polypropylene prices begin the week on a bearish note

In Asia, PP prices started the week with decreases as domestic sellers in China, Indonesia and Vietnam cut prices in response to poor demand and softening propylene feedstock costs, as per Chemorbis. Sellers complain of inadequacy of price cuts to revive demand as buyers expect further price declines in the days ahead. Converters report recent unsatisfactory demand for their end products as they operate with sufficient stock levels to cover their immediate needs. Inside China, a major domestic producer began the week by announcing decreases of CNY200-250/ton (US$31-38/ton) for homo-PP and CNY350/ton (US$54/ton) for PP block copolymer, citing lackluster demand and falling propylene feedstock prices. A distributor commented that news of producer’s price cuts has further dampened buying interest, expressing willingness to negotiate prices with buyers’ firm bids. A converter of manufacturing woven bags expresses purchasing small amounts of material from the local market in anticipation of further price decreases in the days ahead, adding that currently local prices are more attractive than import prices. When taking customs duties as well as an estimated US$30/ton for clearing and handling charges into account, domestic PP prices are currently trading with a discount of approximately US$90-110/ton when compared with the prevailing import prices, suggesting that import sellers will face additional downward pressure in the days ahead. In Indonesia, domestic producers conceded to price reductions of US$70-80/ton on homo-PP prices at the start of this week, bringing new price levels near the prevailing offer levels from the distribution market, which had been trading with a discount of around US$60-90/ton when compared with the producer price level for the past few weeks. Converters in Indonesia do not plan to make any new purchases for the present even after these price reductions as demand for their end products has been disappointing and their stock of previously-purchased higher cost raw materials will work for the present. In Vietnam, distributors reported reducing their offers for both domestic and locally-held import cargoes by US$19-24/ton at the start of this week in the face of persistently sluggish demand from the local market. Converters within the region also reported receiving export offers for Vietnamese origins with decreases of US$20/ton from the past week given weakening propylene feedstock costs and lower prices for locally-held cargoes.
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