China's import price for polypropylene raffia rose $20/mt Thursday to a two-year high at $1,100/mt, S&P Global Platts data showed, as the domestic raffia price in East China extended its recent uptrend.
CFR Far East Asia PP raffia was last assessed at $1,100/mt on July 27, 2015.
PP China domestic raffia weekly price was assessed at Yuan 8,750/mt Wednesday, up Yuan 500/mt ($75/mt) week on week to a six-month high.
Fundamentals have been strengthening recently, with demand expected to increase while domestic supply has been tightening.
"Polymer demand should be increasing for September and strong until October," a Sinopec manager. "Our producer's inventory level has come down a lot from February, and is sitting a bit below average at around 600,000 mt."
Producer inventory peaked at about 1.06 million mt in February, and typically consist of PP and polyethylene in equal proportions, according to industry sources.
"China's environmental checks on the industrial sector have been especially severe [recently], and many factories have been hit with orders for emission cuts, fines, and even closures. Commodity futures have been rising on expectations of production cuts in coal, steel and iron ore, and activity from financial players may be pushing up polymer futures concurrently," a Sumitomo trader said.
The actively traded January 2018 PP raffia contract on the Dalian Commodity Exchange closed at Yuan 9,085/mt Thursday, to be up 6% this month. - Platts -