PP prices moved down in the past week in major Asian markets of India, China and Southeast Asia, with players attributing softer prices to persistently sluggish demand and softer propylene feedstock costs, as per Chemorbis. Demand is not expected to see any major improvements in the last few weeks of the year and most players are expect to see additional discounts on done deals in the days ahead. However, import homo-PP prices in the region currently trading very close to producers’ theoretical production costs based on spot propylene prices may prevent any further deterioration at the lower end of the overall import ranges.
In China, players reported seeing stable to softer prices at the start of this week after three consecutive weeks of declining prices stretching back to early November. “Sellers are not feeling confident about the market outlook and are therefore willing to lower prices to conclude deals,” commented a trader. A trader who reported receiving an initial January homo-PP offer from an Indian producer with a decrease from the producer’s late December price levels said, “We are not planning to make any additional purchases for now as there is not much activity in the market and our customers are generally placing bids below the current offer range.”
In Southeast Asia, two major regional producers opened the week by announcing decreases on their PP prices. A buyer in Indonesia who received reduced prices from a domestic producer commented, “Local supply is ample these days and we can find import cargoes at prices more competitive than the prevailing local levels. We are not willing to purchase beyond our needs for now as we believe that prices will see further decreases in the days ahead.” A source at a Southeast Asian producer who announced their initial January offers with decreases from December stated, “We are not willing to give any additional discounts on our prices as we cannot afford to give any further ground on our prices without pushing our margins into negative territory.” In India, distributors reported receiving lower prices from domestic producers last week, with most distributors commenting that last week’s price reductions have not led to much additional purchasing activity so far. “Most buyers are feeling comfortable with their stocks and are not in any rush to make new purchases,” commented a distributor. “We do not expect to see much increase in purchasing activity until a clearer outlook emerges in the Chinese market.” Another distributor added, “Local sales have been disappointing over the past few weeks as market sentiment is bearish. We will not make additional purchases for now unless our suppliers agree to give us some additional discounts on their prices.”