China’s PP Raffia Export Prices Surge Past $1,400/ton FOB

China’s homo-PP raffia export market has extended its upward momentum for another week, with offers exceeding 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 some Chinese suppliers were preparing to raise quotations above this key threshold amid mounting production costs and restricted 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, pushing the upper end of the FOB China range beyond $1,400/ton. The weekly average has risen by approximately 40% since mid-July, reaching its highest level in the available historical record.

The rally is being driven mainly by elevated crude oil and feedstock prices, low polypropylene (PP) operating rates and limited inventory pressure, rather than a meaningful recovery in downstream demand. As Chinese quotations continue to rise, exporters are finding it increasingly difficult to secure overseas orders, while buyers remain hesitant to commit to purchases at current levels.

Rising costs push Chinese export offers to record levels

The latest increase marks a further extension of the cost-driven rally that has reshaped China’s PP export market since July. Strong crude oil futures, high propane and propylene costs, and firmer domestic futures prices have continued to support sellers’ pricing expectations. Geopolitical risks surrounding the US-Iran conflict have also contributed to energy market volatility, adding to concerns about replacement costs.

Pressure has been particularly strong across the PP production chain. Spot propylene prices in China have risen sharply since early July, while elevated propane costs have squeezed margins for producers using propane dehydrogenation (PDH) technology. With feedstock expenses remaining high, suppliers have limited room to lower export offers without putting further pressure on their margins.

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

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

Chinese export raffia trades 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 in China’s domestic import market.

Current weekly average offers for homo-PP raffia on an FOB China basis stand approximately $120/ton above the corresponding CIF China assessment for Middle Eastern material.

This marks a significant shift in the price relationship between the two sources. In late 2025 and early 2026, Chinese export raffia generally carried only a modest premium over Middle Eastern imports. The difference widened considerably after the initial energy-driven price surge in March.

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

The widening differential highlights the growing competitiveness challenges facing Chinese exporters. Even when differences in freight costs, delivery terms and supplier pricing strategies are considered, Chinese FOB offers remain substantially above Middle Eastern CIF prices, reflecting a significant departure from China’s earlier competitive position.

The shift also points to changing regional trade dynamics. China had previously helped cushion Asian PP markets against disruptions to Middle Eastern supply. However, rising domestic production costs have now made Chinese material a comparatively expensive option, potentially limiting its appeal to overseas buyers.

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