PP prices revealed higher this month to China, market reverses in Turkey

Spot propylene market in Asia has been on a bullish trend, with prices spiking by US$60/ton since the beginning of last week after showing a weak performance during most of July, as per Chemorbis. The recent recovery in spot propylene prices was mainly due to growing supply concerns as a result of the recent shutdowns caused by consecutive fires which broke out at Formosa’s refinery and petrochemical complex in Mailiao, Taiwan. Crude oil prices also rose by US$8.39/barrel since the beginning of July to reach US$81.34/barrel as of the start of this week, with the largest increase being posted in the last few days. Combined with rising upstream costs, greater demand from Chinese buyers helped China’s PP market to move up further this week, with regional and overseas producers revealing August homo-PP prices with noticeable increases to China of US$80-90/ton from their July level. A regional producer, who had initially reduced PP offers by US$20-40/ton for August, withdrew the decreases this week and made a US$100-120/ton increase on top of their prevailing prices. In addition, a trader reported purchasing August shipment cargoes from an Indian producer with a US$90/ton increase compared to the producer’s most recent done deal level. Under the influence of the upward rally in China, the Southeast Asian PP market, which had already seen increases of US$20/ton for Middle Eastern and Indian origins in the previous week, gained further ground this week. In the import market, two producers revealed their sell ideas with increases ranging between US$30-50/ton for the month of August this week. The sentiment in Turkey’s PP market has already started to firm up as the bullish developments outside the country as well as better demand from buyers as a result of their dwindling stock levels provided PP sellers a firm ground to push for higher prices this week. Having witnessed continuous decreases over the month of July, Turkey’s import PP market saw a slight recovery as a couple of Middle Eastern suppliers dropped the low end of their previous offer ranges, which indicates a US$20/ton increase week over week. Now, talks of a firmer August outlook have started to filter through the Turkish market, with an increasing number of reports from buyers that PP sellers are planning to ask for further increases as many traders stopped offering at their previous levels this week. “We are searching the market in order to make some purchases but sellers are not actively offering this week, ” a converter reported, highlighting that traders in Turkey are on a firmer stance this week. The theoretical levels based on Middle Eastern import homo-PP offers to China indicate room for higher prices to Turkey unless the upcoming Ramadan becomes a factor overshadowing the upward momentum.
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