China’s Daqing Petrochemical to cut PP-R supply by 40% in May

04 May 2011 07:01  [Source: ICIS news]

SHANGHAI (ICIS)--China’s Daqing Petrochemical will cut its pipe grade random copolymer polypropylene (PP-R) supply by around 40% in May as its 300,000 tonne/year PP plant will not be producing this grade next month, a company source said on Wednesday.

The producer’s typical average monthly output of pipe grade PP-R was around 8,000 tonnes, he said.

Daqing Petrochemical’s plant is not scheduled to produce pipe grade PP-R in May and it will have only around 5,000 tonnes of PP-R to supply from stock next month, the source said.

“Production at the plant will be switched to yarn grade PP today [4 May],” he said.

Daqing Petrochemical produced around 80,000 tonnes of pipe grade PP-R last year, which accounted for more than 50% of the country’s total output, according to industry estimates.

News of Daqing Petrochemical’s lower output in May boosted sentiment in the domestic pipe grade PP-R retail market, with the bulk of deals concluded at above yuan (CNY) 15,000/tonne ($2,308/tonne) ex-warehouse (EXWH), CNY200/tonne higher from last week, local distributors said.

Offers of imported pipe grade PP-R were at around $2,000/tonne (€1,360/tonne) CFR (cost & freight) China for May shipment, which yields a retail price of more than CNY16,000/tonne EXWH, the distributors said.

Some local distributors believe PP-R prices will rise further in the coming weeks because of the tighter local supply.

($1 = CNY6.50, $1 = €0.68)

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By: Moon Chen
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