Polypropylene (Asia-Pacific) : by Jackie Wong, Lucy Shuai

16:35, 18/09/2021 ICIS Polypropylene Asia-Pacific - Pricing & Insight-17-Sep-2021
Polypropylene (Asia-Pacific)
By Jackie Wong, Lucy Shuai
17-Sep-2021
Overview Outlook Homopolymer Copolymer Other regions Production Upstream

Analytics
Please click here for full details on the criteria ICIS uses in making these price assessments.
OVERVIEW
Buyers await October offers

Offers limited as suppliers target other markets
End-product exports affected by high freight costs
https://subscriber.icis.com/commodity/495/4/1/report/pricing-insight 1/7
Discussions involving polypropylene (PP) slowed down this week as buyers preferred to wait for the October offers, likely to start
being released next week, before making purchases decisions.
Offers were also limited as some suppliers targeted other destinations with better netbacks.
The absence of more competitive offers that were around earlier gave breathing space to suppliers and with freight costs and
upstream chemical prices on the increase, some of them were separately targeting increases.
In China, domestic PP futures prices soared earlier in the week after news emerged that PP production in Yulin would be halved
in September due to the dual energy control policy.
However, buyers were resistance to the steep price increases and when PP futures prices softened, domestic spot prices fell as
well.
OUTLOOK
Dual energy control policy to affect PP output in China

Domestic end-product sales in SE Asia may improve as restrictions ease
High freight costs maintain pressure on some exporters
HOMOPOLYMER
SPOT PRICES
Price Range Four Weeks Ago US CTS/lb
PP BOPP Film
CFR SE Asia All Origins USD/tonne n/c 1200-1275 n/c 1200-1290 54.43-57.83
CFR SE Asia Dutiable* USD/tonne n/c 1200-1240 n/c 1200-1240 54.43-56.25
CFR SE Asia Non-Dutiable USD/tonne n/c 1230-1275 n/c 1255-1290 55.79-57.83
CFR China Main Ports USD/tonne n/c 1100-1175 +45 1110-1150 49.90-53.30
PP IPP Film
PP Injection
CFR Vietnam All Origins USD/tonne n/c 1150-1180 n/c 1165-1190 52.16-53.52
PP Flat Yarn (Raffia)
CFR Vietnam All Origins USD/tonne +10 1170-1200 +10 1170-1190 53.07-54.43

Click here for a list of deals and discussions in China and here for southeast Asia.
Import transactions were limited this week, especially after some suppliers separately increased their offers, as some buyers
were unconvinced that end-product would be able to support such increases.
With control measures easing in some southeast Asian countries, there was optimism that end-product sales would pick up as
well, leading to better PP demand later in September or in October.
However, recent increases in freight costs have made it difficult for converters to export end-products to customers in Europe
and the US among other destinations, which may weigh on the PP market.
Buyers were keen to stay on the sidelines for now as they await the October offers to be released.
Some of them were turning to domestic supply to fulfil their requirements with local suppliers offering competitive prices
compared to import cargoes.
The general perception is that supply within southeast Asia would remain ample, even with some maintenance plans in late
September and October.
Some also expect that certain suppliers would face inventory pressure once more unless demand picks up in the coming weeks.
In China, a spike in PP futures prices gave a boost to domestic PP prices, which in turn provided support for import prices.
However, demand was weakened by the dual energy control policy as well, the same one that has affected PP output, as some
converters in Jiangsu were made to reduce operating rates.
On 17 September, combined polyolefin inventories of Sinopec and PetroChina retreated to 720,000 tonnes.
China homopolymer deals and discussions
PP flat yarn and injection CFR CMP prices were assessed stable to firm based on deals.
BOPP CFR CMP prices were assessed stable to firm in line with flat yarn CFR CMP prices due to a lack of discussions.
SE Asia and Vietnam homopolymer deals and discussions
Dutiable and non-dutiable PP CFR SE Asia prices were kept stable due to limited trades.
Flat yarn CFR Vietnam prices were assessed firmer with the high end reflecting a deal and the low end moved in line with the
high end.
COPOLYMER
SPOT PRICES
Price Range Four Weeks Ago US CTS/lb
PP Block Co-Polymer, General Purpose
PP Random Co-Polymer (10≤MI≤30)

Click here for a list of deals and discussions in China and here for southeast Asia.
Discussions involving the co-polymers were limited, although the easing of restrictions is expected to give a boost to the
demand.
Similarly, end-products exports were affected by high freight costs.
China co-polymer deals and discussions
Block co-polymer CFR CMP prices were assessed stable to firm based on deals.
Random co-polymer CFR CMP prices were assessed stable to firm with the high end reflecting and offer.
SE Asia co-polymer deals and discussions
Co-polymers CFR SE Asia prices were kept stable on limited trades and discussions.
OTHER REGIONS
In Europe, the PP market is under upward pressure, although activity has cooled this week. Extra supply
pressure remains on specialty grades, but commodity grades can also be difficult to source. As a result, there
is an unusually large gap between homopolymer and copolymer. Because shipment problems are not
expected to be resolved soon, this price delta could be maintained into the final quarter.
In the US, PP and propylene supplies continue to be disrupted by the impact of Hurricane Ida, with one PP
plant currently on force majeure expecting to restart over the weekend. Initial production and sales figures for
August published by the American Chemistry Council (ACC) and Vault Consulting suggest that PP inventories
rose to their highest level since June 2020 in August. Upstream, spot propylene prices trended lower, as more
derivative capacity was taken offline by Ida than propylene capacity.
PRODUCTION
Blue: expected capacity Green: online Orange: scheduled shutdown Red: unscheduled shutdown
Click here for the ICIS Live Supply Disruption Tracker
UPSTREAM
Click here for the Asia feedstocks and petrochemicals weekly summary.
The following chart shows the spread between propylene and PP prices:
Feedstock Spread – Propylene and PP SE Asia
FEEDSTOCK SPOT PRICES

Price Range
Propylene
CFR NE Asia USD/tonne n/c 980-1030 +10 -

ANALYTICS
Packaging
Polymers such polypropylene (PP), polyethylene (PE), polyethylene terephthalate (PET) etc. account for
approximately half of the consumer packaging market, depending on end user. (Other materials include
paper, foil, metal, glass etc.). The outlook for global plastics packaging is mixed. Positives include increasing
demand for food packaging, consumer retail goods, etc. In addition, consumer sentiment has improved due to
successful vaccination roll-out programmes which have increased tourism and hospitality. On the other hand,
anti-plastic sentiment and the introduction of various plastic taxes pose a major threat to the market. Bans,
restrictions and taxes on single-use plastics (SUPs) will dent demand, especially in the food packaging sector.
However, SUP usage in the healthcare sector is expected to remain robust. These applications are, in general,
exempt from bans and demand should remain strong.
According to Oxford Economics, the production of food and beverages in North America is forecast to increase
by 4.3% year on year in 2021. Consumer durables continue to outperform non-durables as much of the
population continues to work from home. As a result, demand for computer screens, keyboards, laptops,
printers, etc. is increasing. According to the Centers for Disease Control and Prevention (CDC), in September
53.8% of the population was fully vaccinated and 63.1% had received at least one shot. A successful roll-out of
the vaccine should support consumer spending, increased travel and an improvement in vacation uptake. This
should drive consumption of on-the-go packaging.
European sustainability pressures are among the highest in the world, and brands continue to look for ways to
use either less plastic or introduce more recycled or recyclable plastics into their products. This has resulted in
growing demand for recycled plastics in packaging. European companies are prioritising sustainability over
costs, although the availability of recycled material remains an area of concern. Overall demand for recycled
polymers continues to build as companies adhere to targets set by the EU. The EU directive on SUPs means
that PET bottles must contain a minimum of 25% recycled plastics by 2025 and 30% by 2030. As a result, fast-
moving consumer goods (FMCGs) such as PepsiCo and Coca-Cola have set their own in-house targets which
even exceed the EU’s overall ambitions. In terms of plastic taxes, Italy and Spain have postponed their €0.45/kg
tax until 2022 again, due to the pandemic.
In July, total retail sales of consumer goods in China increased 8.5% year on year, and catering, one of the
hardest hit sectors during the pandemic, surged 14.3% year on year. This suggests that domestic demand is
strong, and this is good news for the packaging sector. Packaging growth was also supported by an increase in
beverage sales which grew 20.8% year on year. Demand for recycled polymers continues to outpace supply in
China and the rest of Asia.
By Jincy Varghese, ICIS demand analyst (jincy.varghese@icis.com)
Polypropylene (Asia-Pacific) | 17-Sep-2021. ICIS accepts no liability for commercial decisions based on the
content of this report. Unauthorised reproduction, onward transmission or copying of the Polypropylene (Asia-
Pacific) Report in either its electronic or hard copy format is illegal. Should you require a licence or an
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16:35, 18/09/2021 ICIS Polypropylene Asia-Pacific - Pricing & Insight-17-Sep-2021

By Jackie Wong, Lucy Shuai

Overview Outlook Homopolymer Copolymer Other regions Production Upstream

Buyers await October offers

Dual energy control policy to affect PP output in China

China homopolymer deals and discussions

SE Asia and Vietnam homopolymer deals and discussions

Similarly, end-products exports were affected by high freight costs.

China co-polymer deals and discussions

SE Asia co-polymer deals and discussions

Click here for the ICIS Live Supply Disruption Tracker

The following chart shows the spread between propylene and PP prices:

FEEDSTOCK SPOT PRICES

By Jincy Varghese, ICIS demand analyst (jincy.varghese@icis.com)

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