<article><p class="lead">Chinese producers and trading firms increased exports of polypropylene (PP) homopolymer products after the 11-17 February lunar new year holiday because of a severe shortage of supplies in the western hemisphere. </p><p>Some market participants expect China's PP exports of February-March loading cargoes to rise to 150,000-200,000t from around 30,000 t/month usually. The cargoes are mainly heading towards Turkey, Europe, south Asia and South America.</p><p>PP raffia export offers have surged to $1,350-1,360/t fob China, compared with $1,000-1,050/t fob China in late January. </p><p>Around 6.9mn t/yr of <a href="https://direct.argusmedia.com/newsandanalysis/article/2189152">PP capacity in the US</a> has been reduced or completely shut down because of a winter storm in Texas. This includes units at LyondellBasell, Ineos Olefins and Polymers, ExxonMobil, Formosa Plastics, Flint Hills Resources and Total Petrochemicals.</p><p>Major crackers in Saudi Arabia — the production hub for polymers in the Middle East — are going through their major February-April turnaround season, reducing PP supplies to Turkey, Europe and India.</p><p>The tightness in overseas markets has opened up the arbitrage window for shipments from China. Some Chinese producers and trading firms have been actively working on exporting cargoes. A major Chinese state-owned producer has secured a deal to export more than 10,000t of PP raffia. The buyer and destination are unclear. </p><p>PP raffia is trading at 9,300-9,400 yuan/t ex-China in east China, or $1,185-1,198/t on an import parity basis, today. Margins for export deals are currently higher than for domestic trades.</p></article>
