09 December 2011 05:48 [Source: ICIS news]
By Belle Huo
Bids and offers were quoted at (CNY) 9,700-9,900/tonne ($1,523-1,554/tonne) EXW (ex-works) in
“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
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
Buyers are currently procuring powdered PP cargoes on a need-to basis, taking into account actual demand.
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
Propylene values will likely continue falling in the coming weeks because of persistently weak demand, market sources said.
Credit conditions in
“Powdered PP prices will likely fall further in the coming weeks because of the lower expectation for local propylene prices and faltering demand,” said a Liaoning-based producer.
Producers have been cutting their offers but still no buyers are surfacing. Some powdered PP makers may have to resort to cutting production further as falling prices have been eroding their margins, market sources said.
($1 = CNY6.37)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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