09 June 2009 07:46 [Source: ICIS news]
By Chow Bee Lin
SINGAPORE (ICIS news)--?xml:namespace>
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
“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
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
“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
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.
($1 = CNY6.83)
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