China PP Rebounds as Higher Costs and Tight Supply Offset Weak Demand

China’s polypropylene (PP) market turned upward this week after several weeks of correction, with domestic, import, and export prices all registering notable gains. The recovery was mainly driven by rising crude oil, propylene, and PP futures, along with tighter spot availability, while downstream demand remained subdued.

The renewed strength in energy markets, supported by fresh geopolitical tensions in the Middle East, increased concerns over feedstock supplies and shipping routes. As production costs climbed, suppliers raised their offers across all segments, while relatively low inventories helped strengthen their bargaining position.

China’s import PP market recorded the strongest recovery, with Homo PP Raffia/Injection prices rising by $100–150/ton, while PP Block Copolymer (PPBC) Injection grades increased by $120–150/ton compared to the previous week.

Domestic prices also moved higher. Homo PP Raffia/Injection grades gained CNY600–700/ton ($89–103/ton), while PPBC Injection increased by CNY800–900/ton ($118–133/ton). Export offers followed the same trend, rising by $50–130/ton as producers adjusted prices to reflect higher production costs.

Current PP Premium Over Pre-War Levels

Import – PPBC Injection

Increase vs Pre-War Level: ▲ $375/ton (44%)

Local – PPBC Injection

Increase vs Pre-War Level: ▲ $373/ton (37%)

Import – Homo PP Raffia & Injection

Increase vs Pre-War Level: ▲ $290/ton (35%)

Local – Homo PP Raffia & Injection

Increase vs Pre-War Level: ▲ $328/ton (34%)

Export – Homo PP Raffia & Injection

Increase vs Pre-War Level: ▲ $245/ton (30%)

Higher feedstock costs remained the primary driver behind the rally. Brent crude oil gained around 10% during the week, while spot propylene prices in China increased by $60/ton. At the same time, PP futures strengthened significantly, encouraging producers to lift prices amid expectations of higher replacement costs.

Supply conditions also supported the market. Although operating rates have improved compared to earlier production cuts, inventories remain relatively low and spot availability is still limited. Many producers adopted cautious selling strategies, preventing any significant increase in supply.

Buying activity improved modestly as some converters replenished inventories before prices moved higher. However, most downstream buyers continued purchasing only for immediate production needs due to weak seasonal demand and uncertainty over future market direction.

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