Currency volatility caps Asian PP demand

Asian polypropylene (PP) demand has been capped by concerns about currency volatility because of the recent strength in the US dollar.

The depreciation of the yuan against the dollar depressed sentiment in China and southeast Asia, although import prices were higher along with rising PP futures.

US-denominated cfr cargoes are typically more expensive in China and emerging southeast Asian markets when the dollar appreciates.

Middle East PP producers, who are away for the Eid al-Adha holiday, are not offering significant PP volumes into Asia this week.

PP raffia prices are at $1,020-1,040/t cfr China and $1,050-1,060/t cfr southeast Asia, according to Argus data.

Local producers in China and southeast Asia, who sell in domestic currencies, have received increased enquiries for cargoes.

PP demand has also been subdued in India as most convertors are well stocked.

New offers for September are expected to surface in the Indian market over the next eight to 10 days. PP raffia prices are at $1,060-1,080/t cfr India, according to Argus data.

Typical cargo sizes into China, southeast Asia and India are 100-1,000t.