Chinese polypropylene (PP) exports fell on the month and on the year in July, because of a decline in domestic supply and a narrowing arbitrage to export markets.
China exported 95,685t of PP in July, down by 19pc from a month earlier and by 16pc from a year earlier, according to latest customs data.
Southeast Asia, South America and south Asia were the top three regions for China's PP exports in July, accounting for 69pc of the total. But exports to southeast Asia and south Asia fell by 28pc and 45pc on the month, respectively, with the declines mainly coming from Vietnam, Bangladesh and Pakistan.
Yet Vietnam remained the largest importer of Chinese PP in July, accounting for 14pc of China's total exports at 13,450t, and 40pc of its exports to southeast Asia. Exports to Bangladesh fell by 45pc on the month and 63pc on the year to 3,239t in July, while supplies to Pakistan declined by 47pc on the month to 4,895t, although they were higher by nearly 75pc from July 2022.
Chinese domestic PP supplies fell in July with a rise in plant outages in July compared with June. Heavy turnarounds at PP plants dragged down operating rates to 76pc in July from 78pc in June, despite the start of the Sinopec Anqing plant with a capacity of 300,000 t/yr in Anhui province of east China.
Chinese PP inventory levels declined to 550,000t on 28 July from 760,000t on 3 July and 640,000t on 14 July, making domestic producers focus on supplies to the local market.
Lower inventory pressure also supported domestic PP prices. Argus assessed PP raffia at 7,200-7,350 yuan/t ex-works on 28 July, or an import parity equivalent of $820-837/t. This was Yn150-300/t higher than the Yn6.900-7,200/t ex-works at the end of June.
