China’s block copolymer PP prices up 5.5% on supply

16 August 2012 08:19  [Source: ICIS news]

SINGAPORE (ICIS)--The retail prices of block copolymer polypropylene (BCPP) in China have risen by 5.5% since late July because of supply concerns in north and east China, local distributors said on Thursday.

BCPP with a melt index (MI) of three or lower were being sold at around yuan (CNY) 11,200-11,600/tonne ($1,761-1,824/tonne) EXWH (ex-warehouse) this week, up CNY500-550/tonne from end July, local distributors said.

Buyers in east and north China have been willing to accept higher prices because local supply is expected to tighten when Sinopec-SABIC Tianjin Petrochemical shuts its 450,000 tonne/year plant in Tianjin at the end of August for scheduled maintenance, the distributors said.

The supply of low MI BCPP had already tightened since the shutdown of Yangzi Petrochemical’s 200,000 tonne/year plant in Jiangsu on 7 August for maintenance.

Zhenhai Refining and Chemical Co (ZRCC)’s 250,000 tonne/year polypropylene (PP) unit only began production of low MI copolymer grade on 14 August, they said.

Yangzi Petrochemical and ZRCC are key low MI BCPP producers, they added.

The price uptrend in north China was also driven by demand from the irrigation pipe and lubricant storage tank application sectors, local traders said.

Demand from the irrigation pipe and lubricant storage tank application sectors was expected to peak in September, they said.

The bullish market sentiment in east and north China drove prices higher in south China, although there was ample supply of low MI BCPP in this region, said distributors in south China.

Demand for low MI BCPP had been lacklustre in south China because of a slowdown in China’s export trade, they said.

Other key applications of low MI BCPP include household ware, home appliances and toys.

($1= CNY6.36)

Additional reporting by Rain Dong, Lizzie Yu, Doreen Zhao, Chow Bee Lin

By: Angie Li
+65 6780 4359

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