China’s PP Raffia Export Offers Surge Beyond $1,400/ton FOB

China’s homo-PP raffia export market has continued its upward movement for another week, with offers crossing the $1,400/ton FOB mark for the first time since market tracking began in January 2021. The latest increase follows indications from late last week that Chinese suppliers were preparing to push quotations above this level amid rising production costs and limited supply.

According to market price data, export offers for homo-PP raffia and injection grades increased by another $40/ton compared with the previous week. The upper end of the FOB China range has now moved beyond $1,400/ton, while the weekly average has climbed around 40% since mid-July to a record high.

The rally remains largely cost-driven rather than supported by stronger downstream consumption. Higher crude oil and feedstock prices, reduced PP operating rates and lower inventory pressure have strengthened sellers’ pricing positions. However, increasingly expensive Chinese offers are making it difficult for exporters to secure overseas orders, as international buyers remain cautious about committing to purchases at current levels.

Rising Feedstock Costs Push Chinese PP Export Prices to Records

The latest gains extend the cost-led rally that has reshaped China’s PP export market since July. Strong crude oil futures, elevated propane and propylene prices, and firmer domestic futures have continued to support sellers’ expectations.

Geopolitical uncertainty surrounding the US-Iran conflict has also kept energy markets volatile, adding to concerns about future replacement costs.

Pressure is particularly evident along the PP production chain. Spot propylene prices in China have increased sharply since early July, while expensive propane has squeezed the margins of propane dehydrogenation (PDH) producers. With feedstock costs remaining high, suppliers have limited flexibility to reduce export prices without putting further pressure on their margins.

A Chinese trader attributed the latest increase to stronger crude oil and futures markets, adding that production costs and market sentiment remained firm. The trader estimated that approximately 24% of China’s PP capacity was still shut down, keeping operating rates relatively low.

The trader also noted that limited inventory pressure had allowed suppliers to maintain firm offers despite sluggish demand.

Chinese PP Raffia Exports Trade at a $120/ton Premium Over Middle Eastern Imports

Another notable development is the widening price gap between Chinese export offers and Middle Eastern PP material entering China.

The weekly average price of homo-PP raffia on an FOB China basis currently stands approximately $120/ton above the corresponding CIF China assessment for Middle Eastern material.

This marks a considerable change from the pricing relationship seen in late 2025 and early 2026, when Chinese export raffia generally carried only a modest premium over Middle Eastern imports. The difference widened sharply following the initial energy-driven price surge in March.

The gap subsequently narrowed during the market correction in late May and June, briefly turning negative. However, Chinese export prices moved decisively above Middle Eastern import levels again from July, with the premium expanding further in recent weeks.

The growing differential highlights the pressure on China’s export competitiveness. Although freight costs, delivery terms and individual supplier strategies differ, Chinese FOB offers now stand substantially above Middle Eastern CIF prices in the domestic import market.

This also points to a shift in regional trade dynamics. China, which previously offered a competitive alternative during periods of Middle Eastern supply disruption, has become a more expensive source as domestic production costs continue to climb.

With prices at record levels and overseas buyers increasingly cautious, Chinese PP exporters may face greater difficulty attracting international demand unless market conditions or cost pressures change.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.