China PP Markets Stage Cautious Recovery as Futures, Oil and Pre-Holiday Buying Lend Support

China’s PP market showed early signs of a cautious recovery in mid-January, with prices turning higher after months of sustained weakness. Firmer upstream costs, rising crude oil, a steady rally in Dalian PP futures, and gradual pre-holiday restocking ahead of the Lunar New Year supported sentiment and lifted buying activity.

PP benchmarks had closed 2025 at exceptionally low levels. FOB China homo-PP raffia and injection averaged $775/ton, the lowest since the ChemOrbis Price Index began in 2021. CIF China raffia and injection stood at $770/ton, the weakest since April 2020, while CIF PPBC injection dropped to $795/ton, last seen in 2008. Domestic ex-warehouse prices fell to CNY 6200–6400/ton, with PPBC touching an all-time low.

After a slow start to 2026, local homo-PP prices posted their first increase since October last week. This week, the recovery broadened, with domestic prices rising CNY 100–150/ton, import offers up by around $10/ton, and FOB China levels gaining up to $15/ton.

Stronger energy and feedstock markets were key contributors. May PP futures on the Dalian Exchange have risen steadily since late December, settling at CNY 6576/ton on January 14, up from CNY 6290/ton at year-end. Brent crude climbed to $65.47/bbl on January 13, supported by geopolitical risks affecting oil flow expectations. CFR China propylene reached $770/ton, a three-month high, adding cost pressure for PP producers.

Ahead of the Lunar New Year holiday, downstream restocking has picked up. Traders reported increased inquiries and better deal volumes, driven mainly by inventory replenishment rather than strong end-use demand. While supply remains ample overall, planned maintenance has temporarily slowed spot availability, offering additional support to prices.

Import prices have moved slightly higher, though still capped by plentiful supply and narrowing arbitrage against domestic material. Export offers also firmed on yuan appreciation and stronger local prices, but overseas demand remains weak, limiting export momentum.

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