In the latter half of May 2025, polypropylene (PP) prices across East Asia, particularly in South Korea, experienced significant fluctuations. South Korean suppliers, who had initially lowered PP offers due to the repercussions of the reciprocal tariff announcement on April 2, later retracted these offers and returned to the market with higher price points. The increase in South Korean PP prices was largely driven by strengthened domestic demand, as manufacturers ramped up the production of export-bound finished goods for the US market.

In China, demand conditions for PP also showed signs of recovery. Domestic consumption improved, and Chinese manufacturers responded by increasing production of PP-based finished goods for export. This recovery followed an extended period of weak trade activity post the fallout of tariffs. The plastic weaving sector displayed volatility, but the operating rate of sampled enterprises edged up by 0.4% to reach 45.7%, which marginally lifted PP consumption in the broader market, therefore Chinese suppliers started independently raising offers in the light of improved domestic consumption.

Market participants across the broader Asian market reported that PP producers in China frequently adjusted their offers, at times multiple times a day, in response to dynamic demand which accordingly are anticipated to present its effects across the South American market.

The increase in Asian PP prices appeared to signal a potential trend reversal in US and Latin American markets. In the weeks following the tariff announcement, demand for PP in these regions weakened further, and spot prices for PP copolymers continued to decline. The impact was especially apparent in Brazil, a key importer of PP from South Korea and China.

In parallel, US PP prices were expected to rise as propane shipments to China resumed. China relies on US-sourced propane to feed its propane dehydrogenation (PDH) units, which are critical for PP production. Roughly 60% of China’s total propane imports originated from the United States. Although PDH unit operating rates in East China declined to 59.59% in May—a 2.7% drop from April—expectations for a rebound gained momentum as US propane exports picked up. This development put upward pressure on US polymer-grade propylene and, in turn, on PP.

Freight costs added further complexity. At the beginning of May, shipping rates from Asia to Latin America were low, enabling Asian-origin PP to undercut local suppliers. However, as the 90-day suspension of retaliatory tariffs prompted a rush to ship goods, freight demand surged. Freight rates from the Far East to South America’s East Coast rose by around 16% in late May, squeezing margins and gradually leading to the disappearance of lower priced PP cargoes across the South American market

In Brazil, these shifts were already evident. Imports of South Korean PP dropped sharply from 2,452.2 tonnes in March to just 917.6 tonnes in April—a 63% decline. Brazilian buyers, who had previously preferred competitively priced South Korean PP, faced limited supply as Korean producers withdrew earlier low-priced offers and re-entered with higher quotations following the tariff pause. Meanwhile, customs data showed that China’s PP exports to Brazil rose by about 31%, temporarily stabilizing supply in the region, with Chinese sellers having offloaded much of the material to the broader South American market, including to Brazil.

Still, sentiment toward Chinese PP in South America remained mixed. Some buyers cited concerns over lead times, product quality, and slow demand from downstream sectors. Others referenced broader Asian PP pricing in local negotiations, using it as leverage.

By late May, PP prices in East Asia—especially in South Korea and China—had risen by 1.2%, recovering from the prior week’s 1.1% decline. In contrast, PP prices across South America remained relatively stable. However, expectations of higher prices persisted among suppliers, as Asian exporters sought to leverage the 90-day tariff window to exit with lower-priced inventories and re-enter the market with higher offers amid rising freight costs.