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The Sharp Rises and Falls of the Polypropene Powder in China

The Sharp Rises and Falls of the Polypropene Powder in China2018.12.25

Polypropylene powder market in China has presented a sharp fluctuation status in the recent month, and the ups and downs of the PP powder price show a “roller coaster” path. As shown in the figure, from the middle and late November to the end of the month, the powder has been declining all the way, from 9,200 Yuan/MT to 8,200 Yuan/MT, with the price drop as much as 1,000 Yuan/MT.


In the early December, the market began to rebound and saw a rapid rise after hitting the bottom, but it did not last and began to decline few days later.


PP Powder Price in China

(Data Source: JLC)


Causes Behind the Ups and Downs


The price of the raw material propylene fell sharply due to the impact of the decline in international crude oil, resulting a limited cost support to the powder. Besides, the spot price for granular materials also fell more than once, and the pressure on the powder market also increased. In addition, the weak demand and low operation rates of the downstream factories lead to a low shipment of the PP powder.


At the beginning of December, the propylene monomer began to rebound and gave a cost support to the PP powder, and PP futures market improved to drive business operations. Moreover, due to the early sluggish market  for a long time, the downstream inventory had consumed and began to replenish, therefore, the powder prices began to rebound. However, when the downstream end finished their replenishment, the transaction became low again. Even if the price of propylene is still acceptable, but the powder market still lack of strong support and show a weak market.
 
Future Trend


At present, the international crude oil slumped again. It is known that there is lack of advantage for the propylene market price, and the overall trading volume is not good. It is expected that the cost support to the PP powder is limited, and the low operation rate of the downstream factories may result in a restricted raw material purchasing power. To sum up, the powder market in the later stage does not have enough advantages, and the market may resume the weak trend.

 

Related Article: 

A look back at Asian PP markets in 2018: Energy costs remain the main driver of pricing

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