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(ICIS) -- Spot powdered polypropylene (PP)
prices in China fell by about 11% since early November, as sellers are under
pressure to shave down their high inventory of the material, market sources said
on Friday.
Bids and offers were quoted at (CNY) 9,700-9,900/tonne
(USD1,523-1,554/tonne) EXW (ex-works) in Shandong on Friday, down by about
CNY1,175/tonne from CNY10,950-11,000/tonne in early November, they said. “The
negotiation levels are hitting the lowest [on] record in the second half of this
year,” said a Shandong-based producer. Mounting inventory levels have caused
panic-selling for some market players, said another producer from
Zhejiang.
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Demand for powdered PP was extremely low from its major downstream - the
woven-bags industry - and this has led to a continuous decline prices of
feedstock propylene, said a source from Dongming Petrochemical Group.
About 80% of China’s powdered PP consumption goes into the production of
woven bags. Buyers are currently procuring powdered PP cargoes on a need-to
basis, taking into account actual demand.
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Xianchao Packaging, a major Zhejiang-based woven bags maker in China, is
cautious about stocking up on feedstock, anticipating a labour shortage leading
to the Lunar New Year festivities in China in late January, said a company
source.
The gloomy global economic climate going into next year is also weighing
down on overall market sentiment in the powdered PP sector, some plastics
processors said.
Prices of feedstock propylene in China were assessed at
CNY9,150-9,300/tonne ex-tank in Shandong on Thursday, down by 19.43% from 9
October, according to Chemease, an ICIS service in China. Propylene values will
likely continue falling in the coming weeks because of persistently weak demand,
market sources said.
mrcplast.com
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