Polypropylene CFR China price peaks to 7 month high on restocking in India, SE Asia

The CFR Far East Asia price of polypropylene raffia and injection grades hit a seven-month high at US$1000/mt Wednesday, rising US$20/mt week on week, as active restocking in India and Southeast Asia limited the flow of cargoes to China, Platts data showed. The price was last at US$1000/mt CFR Far East on August 23, 2015. The current round of price hikes for CFR China cargo is due to strong demand from Southeast Asia rather than domestic demand, a China-based trader said Wednesday. Restocking activity in India in early March, then in Southeast Asia mid-March, soaked up Middle East supply, resulting in less supply for China, market sources said. Reflecting the firmer demand in Southeast Asian markets, a Vietnamese trader said: "Local dealers have been caught flat-footed by the unexpectedly strong demand, with prices going up more than three weeks in a row, forcing them to limit stocks sold." Meanwhile, China's domestic PP prices rose due to the drop in imports to the country. Domestic raffia prices in China rose Yuan 150/mt week on week to Yuan 7,400/mt on Wednesday, equivalent to around US$1050/mt on an FOB China basis, Platts data showed. Taking into account freight cost from China to Vietnam, estimated at about US$10-15/mt, the arbitrage from China to Vietnam is open, sources said. The CFR Southeast Asia raffia marker was assessed at US$1060/mt on Wednesday, up US$10/mt week on week.
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