China could reduce volumes of PP imports from USA due to increased costs

China could significantly reduce volume of US polypropylene (PP) imports as US made PP has become too expensive due to high feedstock costs, as per ICIS. China imported around 493,381 tons of homopolymer grade PP in 2009, about four times more than the 117,673 tons imported in 2008 according to China Customs data. This rise in imports from USA in 2009 was a result of increased consumption as the Chinese Government’s fiscal stimulus package propelled the country’s strong demand for PP, which the US tried to satiate as domestic markets witnessed dull demand. However, US PP prices surged in 2010 on the back of tight supply and strong values of feedstock propylene. PP and propylene supply is tight in USA because the local refineries and crackers are running at below 80% capacity due to high crude values. PP producers typically need $150/tonne spread over propylene to make operations viable. Also, PP supply is tight because of a preference for natural gas by US crackers leading to more ethylene than propylene produced, and hence less feedstock available for PP production US PP injection and yarn grade prices have surged 115% on average from 9 January to 70 US cents/lb in the week ending 19 February, according to ICIS pricing data. Asian PP is currently priced lower than the US material. In the US, the benchmark PP injection and yarn grades were assessed at US$1452-1495/ton FOB US Gulf for the week ended 19 February, while in Asia, injection and yarn grades were assessed at US$1240-1320/ton CFR China for the same week.. Rising US-China freight rate is also making it increasingly difficult to make US export work in China. US-China freight has been rising because the drastic fall in Chinese exports to the US has reduced the number of returning vessels. Tighter US PP supply had also made room for more Asian exports to South America - the traditional market for US suppliers.
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha