Asian PP markets see cautious demand amid high costs

In line with the recent rally in upstream markets, spot PP markets in Asia have regained some strength over the past week, as per Chemorbis. However, sellers offering at the upper end of the ranges continue to complain of slow sales as demand has not picked up in proportion with rising costs. Domestic PP offers moved back to levels seen two weeks ago as sellers launched another push to raise prices in line with increasing upstream costs. Spot propylene prices also gained US$20/ton on the week, amid rising upstream markets that encouraged seller and traders to take a firmer stance on their import offers. Import offers for homo-PP gained some ground on the upper end towards the end of the week. However, caution on the part of buyers has also prevented spot PP markets from rising to match the full extent of the increase in upstream costs. Following the most recent increases, spot FOB Korea propylene prices have surpassed the low end of the prevailing homo-PP price range, as sellers offering at the upper end of the range are offering at US$95/ton below their theoretical break-even level. In Southeast Asia, the overall range for import homo-PP injection and raffia was reported mostly stable this week, although the prevailing done deal level moved up by around twenty dollars when compared with the beginning of the week as some distributors began restocking cargoes out of fears of price increases. The increasing firmness in the market has not resulted in corresponding rise in upstream costs as many buyers are electing to remain on the sidelines, commenting that they believe that the current run-up in prices will prove to be a temporary phenomenon as supply/demand dynamics continue to point to lower prices over the medium term.
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