China PP powder prices on downtrend; producers face margin squeeze

25 April 2017 10:35 Source:ICIS News

SINGAPORE (ICIS)--Domestic polypropylene (PP) powder prices in China have been falling, with producers restricting output amid margin squeeze.

PP powder prices in April stood at Chinese yuan (CNY) 7,400/tonne EXWH (ex-warehouse) Shandong, down from an average of CNY8,050/tonne EXWH in March, according to the China editorial team at ICIS.

Margins for producing PP powder look set to continue declining, as PP powder prices are falling faster compared with its feedstock propylene, market sources said.

Consequently, a number of PP powder makers are scaling back production, with some even shutting down their plants to avert losses.

In 2016, China’s PP powder output totaled 2.87m tonnes, representing about 14% of the country’s total PP output, while PP granules production accounted for the remaining 86% at 17.04m tonnes last year.

PP powder are typically priced lower than PP granules, with end-users switching to the granular form when the price spread falls below CNY200/tonne.

The price spread is currently at around CNY200/tonne, recovering from an average of CNY78/tonne in March, according to the China editorial team at ICIS.

($1 = CNY6.88)

By Amy Yu