China’s Polyolefin Prices Climb After Holiday, with PP Leading the Gains

China’s domestic and export markets for polypropylene (PP) and polyethylene (PE) began the first full working week following the holiday with sellers raising their prices significantly compared with pre-holiday levels. Limited availability of feedstocks and polymers, production reductions, and a strong rise in futures prices have supported the market’s upward movement, with PP recording stronger gains than PE.

Despite the firming market outlook, downstream manufacturers remain cautious about purchasing materials at higher prices. Market participants are closely monitoring the balance between tightening supply and demand, which has yet to demonstrate a clear recovery.

Post-Holiday Price Increases Strengthen, Led by PP

China’s domestic PP market witnessed substantial price increases after the holiday. Offers across various grades from several traders rose by approximately CNY 700–950 per ton ($105–142 per ton) compared with the latest pre-holiday quotations. Export offers for homo-PP raffia and injection grades also increased, with one trader reporting gains of $60–70 per ton.

PE prices also returned to the market on a stronger footing, although increases differed depending on the grade, supplier, and material origin. Domestic post-holiday offers rose by around CNY 80–700 per ton ($12–105 per ton) from their last pre-holiday levels. Reduced availability and a firmer pricing approach among suppliers contributed to the upward adjustments.

Rising futures prices provided additional support to the market. As of October 13, January LLDPE futures on the Dalian Commodity Exchange had increased by CNY 754 per ton ($113 per ton), while January PP futures gained CNY 862 per ton ($129 per ton) compared with their September 30 levels before the holiday.

Market participants attributed the stronger sentiment to tighter feedstock and polymer supplies, alongside gains in futures. Some producers have also faced significant financial losses, prompting shutdowns at their PP and PE production units and further limiting available supply.

Higher Upstream Costs Support Market Sentiment

Developments in upstream markets have continued to strengthen sellers’ pricing positions. Brent crude futures settled above $105 per barrel on October 12 and remained slightly below that level when the market was assessed on October 13.

Among key feedstocks, spot propylene prices on a CFR China basis rose by $110 per ton over two weeks, approaching a six-month high. Spot ethylene prices on the same basis remained largely stable at the beginning of the week, maintaining an elevated cost base despite having declined during the two weeks before the holiday.

Current market conditions indicate that PP has stronger support than PE in the post-holiday period. One trader connected the sharp rise in PP prices to the Iran–US conflict around the Strait of Hormuz, highlighting its effects on PP and important feedstocks, including methanol, propylene, naphtha, and crude oil. The trader also noted that PP production rates had fallen to their lowest levels for the corresponding period in five years.

Market Awaits a Stronger Response from Buyers

Toward the end of September, selling pressure had eased, while low industry inventories encouraged suppliers to maintain firm prices. However, downstream manufacturers showed limited interest in replenishing stocks before the holiday, restricting trading activity at higher price levels.

Following the latest price increases, sellers are now waiting to see whether buyers will accept the new quotations and whether purchasing activity will improve as post-holiday operations resume.

Demand has remained subdued during the first full working week after the holiday. Many downstream manufacturers have stayed away from the market or adopted a wait-and-watch approach, preferring to assess conditions in end-use industries before committing to new purchases.

The near-term direction of China’s PP and PE markets will therefore depend on how buyers respond to elevated prices and whether demand strengthens enough to sustain the current upward momentum.

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