Healthy Fundamentals Promoting PP Price to Ramp Up in Apr
China’s PP market prices rose before falling in the first quarter of 2021, and wait-and-see sentiment became obvious later. According to SCI, PP market prices are projected to stabilize and then ramp up in April, because supply will decrease due to intensive maintenance, and downstream rigid demand will stay firm.
In Q1, 2021, China’s PP market prices increased at first but then dropped.
In January, China’s PP market prices rebounded after inching down. In the first half of January, PP prices were weak due to ample supply, softer pricing policy from local producers and scarce deals. Local producers faced rising supply with decreasing maintenance and commissioning of newly added units at Wanhua Chemical Group. Meanwhile, they reduced sales prices under the intention of cutting inventories before the Spring Festival holiday, but downstream enterprises had some inventories of PP and purchased that limitedly, weighing down the prices. In some regions, the power restriction and production suspension appeared due to the environmental protection policy. The outbreak of pandemic aggravated the bearish sentiment and price decreases.
However, the demand for pandemic prevention supplies increased, so the production ratio of PP raffia declined, while that of other grades rose. Falling production ratio and previous overselling led to insufficient supply of PP raffia, which promoted PP prices to rebound.
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