FocusChina’s May PP imports may exceed 500,000 tonnes - traders

09 June 2009 07:46  [Source: ICIS news]

By Chow Bee Lin

SINGAPORE (ICIS news)--China’s polypropylene (PP) imports may have exceeded 500,000 tonnes last month as low-priced cargoes attracted many new players to the market in the first quarter, but the surge may dampen domestic values, traders said on Tuesday.

This demand in turn drew large supplies from the regular as well as not so regular suppliers, they said.

The strong import interest was also driven by a general expectation among Chinese traders that the home appliance subsidy introduced by the government recently could spur domestic PP demand, and the heavy maintenance shutdown of local plants from April to June could tighten supplies, they added.

The May imports, if the estimates turn out to be correct, would be exceptionally high as China’s average monthly PP imports were 265,000 tonnes last year, and about 364,000 tonnes in the first four months this year, according to China Custom data.

“Many new local trading companies came into the PP market in the first quarter this year, as imported cargoes were still competitive in the domestic market due to their low prices - even after the import duty and value added tax were added on,” a trader in eastern China said.

He added that China's PP imports were expected to be even more in June.

The increased demand in China led regular exporters such as South Korea, and not so regular sources in Europe and the Americas, to increase their export volumes, a trader in southern China said.

There were concerns that May imports, if they did turn out to be over 500,000 tonnes, could dampen buying sentiment in the domestic PP market, the trader in southern China said.

“Some traders were hoping that the prices of locally produced PP injection and yarn grades will hover around yuan (CNY) 9,300-9,500/tonne ($1,362-1,391/tonne) ex-warehouse in May, but news of the exceptionally high May PP imports had dashed such hopes,” he added.

The traders hoped domestic PP prices could remain stable or rise further because polyethylene (PE) prices had staged a strong rebound last week partly due to high crude values, and hence there should still be room for PP to gain grounds.

Benchmark high density polyethylene (HDPE) was discussed at CNY11,000-11,200/tonne ex-warehouse, CNY200-700/tonne higher from early April, according to China chemicals market intelligence service ICIS chemease.

Benchmark PP injection and yarn grades were discussed at CNY 9,100-9,400/tonne ex-warehouse in the week ended 5 June, CNY300-400/tonne lower from early April, according to ICIS chemease.

China’s official PP import figures for May were expected to be announced by end June.

($1 = CNY6.83)

For more on PP visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Chow Bee Lin
+65 6780 4359

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly