PolymerFriday, 29 May 2026·India
Falling Dalian PP futures cool China’s strong homo-PP spot rally
China’s domestic homo-PP raffia and injection market has started correcting this week after recently touching its highest levels since October 2021. The market reversal came as weaker crude oil prices and continuous declines in Dalian PP futures pressured spot sentiment and triggered price adjustments.
Local homo-PP prices, which had surged around 45% since early March during the war-driven rally, reportedly fell by CNY200-400/ton ($29-59/ton) from last week’s peak levels.
Market sentiment weakened after September PP futures on the Dalian Commodity Exchange recorded four straight daily declines. The contract dropped by CNY99/ton on May 21, followed by losses of CNY111/ton on May 22, CNY142/ton on May 25, and another CNY157/ton on May 26.
The decline in futures closely followed the correction in global crude oil markets after reports suggested that the United States and Iran were moving closer toward a possible peace agreement. Brent crude prices slipped below the $100/barrel mark again, reducing part of the geopolitical premium that had strongly supported polymer markets over the past three months.
Market participants said the weaker energy market and falling futures quickly affected China’s local PP spot market, which many players had already considered overheated following the recent sharp rally.
China’s homo-PP raffia and injection prices had risen aggressively between early March and early April amid concerns over supply disruptions linked to the Iran-US conflict and the closure of the Strait of Hormuz. The market then moved sideways for several weeks before gaining fresh momentum over the last two weeks due to tighter prompt supply caused by ongoing plant maintenance shutdowns.
The latest rally pushed the market to its highest point since October 2021 and lifted cumulative gains since early March to around 45%, according to market data.
However, buying sentiment weakened this week as downstream demand remained soft and buyers became increasingly cautious about high price levels.
A Shanghai-based trader said local PP prices corrected after the sharp fall in crude oil and futures markets, while downstream buyers continued resisting elevated prices. The trader added that most buyers currently prefer domestic material over imports because of lower prices and reduced risk exposure, while many are purchasing only limited volumes to meet immediate requirements.
Another market participant also reported weaker local and export PP prices, noting that actual trading activity remained limited due to sluggish domestic and overseas demand conditions.
Despite the recent correction, several traders believe PP fundamentals remain relatively stronger than PE because supply conditions are still comparatively tight.
Market sources noted that prompt PP availability is expected to remain limited even though some production units have restarted after maintenance, as several plants are still offline. Some traders also described PP as one of the tightest-supplied products within China’s polymer market, which continues to support bullish sentiment to some extent.
At the same time, import offers for Middle Eastern PP cargoes reportedly softened this week following weaker feedstock costs. However, imported material still remains significantly more expensive than locally produced coal-based and oil-based Chinese cargoes.
According to traders, Chinese buyers continue favoring domestic supplies over imported cargoes because of pricing advantages and lower risks, while many overseas suppliers are increasingly redirecting Middle Eastern and Northeast Asian cargoes toward Southeast Asia where returns remain more attractive.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.
Local homo-PP prices, which had surged around 45% since early March during the war-driven rally, reportedly fell by CNY200-400/ton ($29-59/ton) from last week’s peak levels.
Market sentiment weakened after September PP futures on the Dalian Commodity Exchange recorded four straight daily declines. The contract dropped by CNY99/ton on May 21, followed by losses of CNY111/ton on May 22, CNY142/ton on May 25, and another CNY157/ton on May 26.
The decline in futures closely followed the correction in global crude oil markets after reports suggested that the United States and Iran were moving closer toward a possible peace agreement. Brent crude prices slipped below the $100/barrel mark again, reducing part of the geopolitical premium that had strongly supported polymer markets over the past three months.
Market participants said the weaker energy market and falling futures quickly affected China’s local PP spot market, which many players had already considered overheated following the recent sharp rally.
China’s homo-PP raffia and injection prices had risen aggressively between early March and early April amid concerns over supply disruptions linked to the Iran-US conflict and the closure of the Strait of Hormuz. The market then moved sideways for several weeks before gaining fresh momentum over the last two weeks due to tighter prompt supply caused by ongoing plant maintenance shutdowns.
The latest rally pushed the market to its highest point since October 2021 and lifted cumulative gains since early March to around 45%, according to market data.
However, buying sentiment weakened this week as downstream demand remained soft and buyers became increasingly cautious about high price levels.
A Shanghai-based trader said local PP prices corrected after the sharp fall in crude oil and futures markets, while downstream buyers continued resisting elevated prices. The trader added that most buyers currently prefer domestic material over imports because of lower prices and reduced risk exposure, while many are purchasing only limited volumes to meet immediate requirements.
Another market participant also reported weaker local and export PP prices, noting that actual trading activity remained limited due to sluggish domestic and overseas demand conditions.
Despite the recent correction, several traders believe PP fundamentals remain relatively stronger than PE because supply conditions are still comparatively tight.
Market sources noted that prompt PP availability is expected to remain limited even though some production units have restarted after maintenance, as several plants are still offline. Some traders also described PP as one of the tightest-supplied products within China’s polymer market, which continues to support bullish sentiment to some extent.
At the same time, import offers for Middle Eastern PP cargoes reportedly softened this week following weaker feedstock costs. However, imported material still remains significantly more expensive than locally produced coal-based and oil-based Chinese cargoes.
According to traders, Chinese buyers continue favoring domestic supplies over imported cargoes because of pricing advantages and lower risks, while many overseas suppliers are increasingly redirecting Middle Eastern and Northeast Asian cargoes toward Southeast Asia where returns remain more attractive.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.