As of Tuesday, the midpoint of the current FOB China range reached its highest level since May 2022, according to ChemOrbis Price Index data. Since early March—when China resumed activity after the Lunar New Year holidays alongside escalating conflict in the Middle East—homo-PP raffia export prices have surged by nearly 50%.
FOB China prices extend rally
The latest increase has been driven by persistently tight regional supply and elevated upstream costs. Market participants report that offers below $1200/ton FOB China have largely disappeared, highlighting the sharp pace of the recent price surge.
A Chinese trader noted that export sentiment remains firm, supported by stronger overseas demand as buyers turn to Chinese material following supply disruptions in the Middle East.
“PP saw fresh gains. The Middle East supply disruptions in recent weeks have made overseas demand for Chinese PP more active, with more inquiries,” the trader said. “However, a key issue is that domestic coal-based chemical production is large and profit margins are relatively strong. Some domestic and Southeast Asian customers are increasingly using recycled materials to avoid high-priced virgin materials. Southeast Asian demand weakened slightly in recent weeks. Export pricing remains relatively high.”
These comments indicate that while supply shortages continue to support the market, elevated prices are beginning to weigh on downstream demand in certain regions.
War disruptions redraw regional trade flows
The rally began in early March as China returned from the Lunar New Year holiday amid rising geopolitical tensions in the Middle East.
The conflict and disruption in the Strait of Hormuz significantly impacted the flow of crude oil, feedstocks, and petrochemical products, pushing costs higher across Asia. Reduced PP supply from the Middle East—traditionally a key supplier to Asia, particularly Southeast Asia—has further tightened availability.
At the same time, disruptions in feedstock flows have created additional pressure on Asian producers, reinforcing supply constraints. In this environment, China has emerged as a more critical supplier of PP to regional markets.
This shift also reflects longer-term structural changes in China’s PP trade balance. The country has been reducing reliance on imports while steadily increasing exports, narrowing the gap between the two. The latest supply shock has accelerated this transition, further strengthening the role of Chinese-origin PP in Asia’s spot markets.
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