Wavering Demand Pushes R-PP Prices to Demonstrate Plunging Trend in China

Shanghai, China: In the Chinese domestic market, Recycled Polypropylene (R-PP) price offers have gained downward momentum and significantly tumbled to last week's observed costs. The crippled manufacturing activities have weighed on the downstream packaging and film industries' demand outlook for recycled plastics.

As per the latest data, the spot offers for R-PP have decreased by approximately 25 USD per ton on August 2nd, 2022, compared to last week's prices. The copious availability of post-consumer-bales has supported the current market value of R-PP in the regional market. The market participants have reported limited inquiries from the terminal sector for R-PP, leading to bearish market sentiments in the domestic region.

In addition, the plunging offers for virgin polypropylene have provoked the downstream packaging industries to shift their inclination from R-PP. The declining interest in Recycled Polypropylene from the terminal sector has pushed the R-PP manufacturers to reduce their quotations. Moreover, the upstream crude oil prices dropped by 4% yesterday, as factories across Asia, Europe, and North America have struggled to gain momentum amid the slowdown brought on by the COVID-19 lockdown and hostilities between European Nations.

On the other hand, China Tianying (CNTY) has planned to implement UpCycle Process Technology by Honeywell to enhance recycled plastic products for the circular economy. This technology will help to expand the types of recycled plastics and minimize the consumption of fossil fuels for virgin plastic manufacturing, eventually aiding in reducing the carbon footprint.

As per ChemAnalyst, the pricing dynamics of R-PP are likely to maintain their downward trajectory in the near term. The volatile energy costs amid the global recession fears will significantly impact the benchmark prices of R-PP in the domestic region in the forthcoming weeks. In addition, the dampening demand from the downstream packaging sector is also likely to cause a headwind to the market growth of R-PP.