A fall in Chinese demand for face masks as the Covid-19 outbreak is brought under control in the country has weighed on melt-blown polypropylene (PP) prices amid ample supplies of the medical product.
Prices of melt-blown PP grade 1500 fell to 20,000 yuan/t ($2,820/t) this week from a peak of Yn80,000/t in early April. Prices of high-melt-index fibre grade PP also declined to Yn8,300-8,450/t ex-warehouse this week from a peak of Yn30,000/t two months ago.
Their price premiums to PP raffia have narrowed to a reasonable level over the last three weeks. Domestic raffia prices were at Yn7,700-7,900/t ex-warehouse this week, up by Yn200/t from last week. Some PP plants are shifting back to producing more raffia grade. Around 40pc of PP plants were producing the fibre grade in early April compared with the usual 10pc now.
Inventories of polyethylene and PP at Chinese state-controlled producers Sinopec and PetroChina rose slightly to 730,000t on 3 June from 705,000t last week. But this is still within typical inventory levels of around 700,000-800,000t.
China's overall PP market has lost some support following the fall in domestic demand for face masks. Seasonal demand for PP is declining as well, although supplies have also fallen in the second quarter of this year amid ongoing turnarounds.
