PP USD Prices Possibly to Grow in Q1 2025 on Improved Fundamentals
Highlights: The change in PP fundamentals has been limited recently, which makes it difficult to drive the price. In Q1 of 2025, will PP USD prices warm up with the advent of spring?
PP prices were mostly stable in Q4 2024. The import arbitrage window remained closed, and the export profits were favorable with prices rising sometimes. The highest and lowest values of homo PP raffia and injection CFR China were $920/mt in early October and $890/mt in early-to-mid November. For PP copolymer injection CFR China, the highest and lowest values were $950/mt and $920/mt respectively in early October and early-to-mid November. Generally, PP import prices were mainly pressured by softer-than-expected demand before the demand peak season and lower feedstock costs. Meanwhile, China’s domestic PP prices kept falling with continuous capacity expansion. Overseas suppliers showed weaker passion in offering prices to China, so China’s PP import business weakened.
PP prices were mainly range-bound amid narrow changes in fundamentals.
PP market prices dropped after a temporary increment in October. In early October, PP prices mounted up notably on the back of passable macro environment and continuous rises in crude oil values. However, softer fundamentals, macro environment and crude oil prices dragged down mainstream prices of PP. From November to December, the start-up of new units further pulled down domestic PP prices in China. At the same time, the exchange rate of USD against RMB remained high, and overseas suppliers’ appetite for providing quotations to China was poor. PP import prices were largely steady.
China’s PP prices stood at a global low, impacting quotations from overseas suppliers. PP import and export markets performed differently.
It was hard for China’s PP imports to change violently in Q4 2025. PP import dependence degree dropped gradually in China, and PP import volume hardly improved and hovered marginally within 300-350kt. Downstream users preferred to purchase PP agilely according to their orders.
Besides low prices and large supply pressure, high exchange rates during the year also increased the operating opportunities in China’s PP export market. In particular, the exchange rate of USD against RMB value has climbed rapidly since late November and hit a new high of around 7.19. This supported the PP export business. However, deals brightened narrowly because of limited overseas demand in November. In December, export offers were stable and there were arbitrage opportunities for export business due to the high exchange rate, leading to an advancement in deals.
PP USD prices are likely to go up with the postponement of new unit start-up in China, overseas unit maintenance and optimistic outlook for macro environment and demand.
There are still many commissioning plans for China’s PP units in Q1 2025, while the research shows that most plans may be put off, so the output release may exert a limited effect on the PP market. Meanwhile, PP units in the Middle East, South Asia and South Korea are also planned to undergo maintenance. Furthermore, given that some South Asian plants have been shut down to ease the supply pressure, SCI reckons that overseas PP supply may be short in Q1 2025, which will probably buoy the PP USD prices. However, downstream and end plants may resume production successively after the Spring Festival holiday after mid-February, and the small demand peak season in March and April may witness an improvement in domestic demand and export demand. Participants are recommended to focus on the impact of changes in overseas trade protection policies and the slowing pace of macro-level interest rate cuts on the PP market. Overall, the PP USD market prices may be stable-to-rising slightly in the first quarter of 2025, but the trading activity may still be under pressure.
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