OREANDA-NEWS. October 09, 2012. In China, import PP prices have started to rise, with some overseas producers announcing higher October prices to the country, as per ChemOrbis. In upstream news, spot propylene prices are USD15/ton lower than the early September levels on an FOB Korea basis but producers commented that theoretical production costs based on spot propylene remain at unworkable levels even after the recent losses in spot propylene prices.

Two major Asian producers revealed their new October homo-PP prices to China with increases. An Indian producer initially lifted their prices by USD 15/ton at the start of the week before issuing additional increases of USD 45/ton the next day, bringing the cumulative hike announcement to USD 60/ton on the week. Meanwhile, a South Korean producer lifted October prices to China by USD 20/ton.

The overall import homo-PP range for both dutiable and non-dutiable origins now stands USD 30-40/ton higher when compared to last week Inside China, locally held prices also recorded increases, gaining CNY350-450/ton (USD 55-71/ton) when compared to last week. Local producers Sinopec and CNPC both raised their offer levels by a cumulative amount of CNY400-500/ton (USD54-67/ton), according to a distributor in Hangzhou.

A source from a domestic producer commented to ChemOrbis, “We lifted our PP prices on the back of firm oil and plastic futures prices. Our price hike decision was also in line with the other domestic producer’s increased offers. We think that prices will remain firm on the back of higher feedstock costs, although buyers are currently offering resistance to higher offer levels.” A trader reported, “Higher crude oil and plastic futures prices drove up PP prices earlier in the week and domestic producers’ price hikes also pushed prices higher. For now, we are not willing to offer any large discounts as we believe that prices will maintain their firm trend over the short term.”

Overall demand is reported to be normal in China, with converters showing steady buying interest and traders building up some stocks on the back of their expectations of seeing further price increases. Some traders also complained about availability issues, saying that the local producers are refraining from concluding deals for large quantities while prices are on a rising trend..