China PP import prices rebound on restocking, low domestic supply

01 June 2012 04:05  [Source: ICIS news]

SINGAPORE (ICIS)--Average polypropylene (PP) import prices in China rebounded this week, stemming a three-week downtrend, on the back of restocking and reduced domestic supply, industry sources said on Friday.

The benchmark PP yarn grade was sold at $1,330-1,370/tonne (€1,077-1,110/tonne) CFR (cost and freight) China this week, up by about $40/tonne on average from last week, according to Chinese buyers and Asian sellers.

In the week ended 25 May, China’s average PP yarn import prices had hit a 19-week low of $1,320/tonne CFR China, shedding 8.7% over three consecutive weeks, according to ICIS.

Restocking activity is mainly driven by Chinese traders who had drawn down  their inventories from end-March to early April on fears that regional PP prices would fall in tandem with falling values of feedstock propylene, market sources said.

Local traders also went on a buying spree of imported material following cuts in supply allocations by Chinese PP majors Sinopec and PetroChina in the domestic market, they said.

Sinopec and PetroChina are attempting to support domestic retail PP prices, by cutting allocations to local distributors, they said.

Some Chinese traders, which had earlier bought higher-priced cargoes, have returned to the import market for lower-priced material this week, with the aim of averaging out their raw material costs, market sources said.

($1 = €0.81)

Additional reporting by Chow Bee Lin

By: Angie Li
+65 6780 4359

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