Polypropylene Prices to Remain on a Growth Trajectory in China

Polypropylene prices have been rising in China since mid-October which were stable for three months before October. The prices have been firming up due to supply squeeze and rising fears of production cuts on account of electricity shortages. The condition of prices is further exacerbated due to a spurt in demand from the local consumer industries following their return from the holidays in the first week of October.

The price on October 8 was $1236 per tonne which rose by almost 9% to $1345 per tonne in the mid-October. The prices in November have also been high with the prices hovering around the $1340 mark in the first week of November.

The prices of the feedstock Propylene also rose by almost 15% during the month of October. This was also among the major reasons for the price hike.

The prices are expected to settle down in the long run with the ExxonMobil planning to build a new petrochemical complex with a nameplate capacity of 1.6 million tonnes of polypropylene. As the effect of the power outages and dual control policy fade away, the prices will also tend to stabilize to lower levels.

Polypropylene is a thermoplastic polymer which is used in a variety of applications. Polypropylene has resistance against chemicals, thermal resistance etc. which is why it is used in packaging, automotive, building and construction, healthcare, and electronics. The global Polypropylene demand stood at around 90 million tonnes in 2020 and is expected to grow at a healthy rate of 5.6% in the coming years.

As per ChemAnalyst, “the hike in the prices of Polypropylene in China in the month of October is majorly driven by high feedstock prices and supply crunch which was caused by power outages. The demand has also been buoyant in the Asian markets. The supply situation is expected to improve in China with ExxonMobil announcing a new petrochemical complex in China with a production capacity of 1.6 million tonnes.”