14 November 2011 07:00 [Source: ICIS news]
By Moon Chen
SINGAPORE (ICIS)--China’s polypropylene (PP) pipe resin prices are expected to rise in the second half of November because of tighter domestic supply, industry sources said on Monday.
The domestic supply of PP pipe resin will be tightened because Daqing Refining & Chemicals will not be producing this grade in November, local PP resin traders said.
Daqing Refining & Chemicals will be producing PP yarn grade and biaxially oriented PP (BOPP) grade at its 300,000 tonne/year plant at Heilongjiang province through November, a company source said.
The producer has no plans to switch to PP pipe grade in the near term, the company source added.
Daqing Refining & Chemicals produced more than 80,000 tonnes of PP pipe resins, including PP random copolymer (PPR) and PP block copolymer (PPB), in the first half of this year, which accounted for around 45% of the country’s total output, according to industry estimates.
Locally produced PPR and PPB are selling at yuan (CNY) 12,500/tonne ($1,972/tonne) EXWH (ex-warehouse) in east China this week, according to Chemease, an ICIS service in China.
The tighter domestic supply of PPR is unlikely to spur demand for imported material as local demand is expected to be weak in November and December because of winter, local traders said.
China imports very little PPB, they said.
Imports accounted for around 40% of China’s PPR demand in the first half of this year, according to industry estimates.
Imported PPR was offered at $1,550/tonne (€1,116/tonne) CFR (cost & freight) China this week for November shipment, according to Chemease.
The key exporters of PPR include South Korea’s Hyosung and Korea Petrochemical Industry Co (KPIC) and global producer LyondellBasell.
($1 = CNY6.34, $1 = €0.72)
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