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Asian Viewpoints

China PP prices to soften from Aug on completion of maintenance

In China, the spread of COVID-19 is mostly under control. Under this situation, polypropylene (PP) prices might be bearish from August onwards since facilities will restart after maintenance and supply is expected to increase.

 

Until now, the PP market has been bullish because of high feedstock costs including crude oil and tight supply along with maintenance of many facilities. Many PP facilities entered maintenance from the end of June to the middle of July and facilities with total capacity of 3.84mil mt/year were shut down. For this reason, domestic PP supply was tight until July. But these facilities are expected to restart from the end of July to the middle of August. Along with this, PP supply is expected to increase sharply in August. In addition to this, new facilities owned by Baolai Petrochemical and Longyou Chemical will start up going forward and this will also make supply ample.

 

On the demand side, operating rates of derivative makers started decreasing from the middle of July and buying interest for PP is receding. Further, the Chinese government will prohibit the use of straws for drinks from the end of 2020 in some regions to protect the environment.

Shanghai : Kim Setsubai   +81-3-3552-2411Copyright © RIM Intelligence Co. ALL RIGHTS RESERVED.