Thai Polypropylene Co’s new 400,000 tpa PP plant that started up in March, is running at 75% capacity due to poor margins amid subdued demand as per Platts. PP margins were negative by US$77.50/mt at the close of market on Tuesday, based on a raffia grade PP price of US$1140/mt CFR China/Northeast Asia, propylene value of US$1067.50/mt CFR China and a monomer-to-polymer conversion cost of US$150/mt. To break even a PP producer in Asia needs to price raffia cargoes at a minimum of US$1217.50/mt CFR China/NE Asia (US$150/mt above the price of propylene).
TPP’s plant located at Map Ta Phut in Rayong was hinted to achieve 100% run rate by July, but has fallen short of its target. TPP’s two other PP plants with a combined production capacity of 320,000 tpa are operating at 100% capacity.
Majority of TPP's PP sales are local, with exports to neighboring Southeast Asian countries of Indonesia, Myanmar, the Philippines and Vietnam. Plans to increase exports to China, the Indian subcontinent and Africa were on the cards when the new plant is fully on stream.