China's Record Polypropylene Exports Drive Asian Price Increases

Polypropylene producers across China raised ex-works quotations on Monday, as prolonged supply disruptions in the Middle East continued to impact Asian olefin economics. Jingmen Petrochemical, Daqing Petrochemical, and Fushun Petrochemical were among those that increased prices for various grades of PP.

Spot prices from merchants followed the producer adjustments, with trading reported as moderate. This marks the third consecutive month that Chinese state-linked petrochemical complexes have increased their nominations, mirroring sustained pressure from upstream naphtha and propylene values.

Due to the situation in the Strait of Hormuz and reduced naphtha flows into Asia, South Korean cracker operating rates have fallen. China's coal-to-olefin and propane dehydrogenation routes, less exposed to these issues, are capturing improved spreads by exporting into the gaps left by Middle Eastern and Korean supply.

China's polypropylene exports hit a record 405,500 tonnes in March, confirming the country's transition to a net exporter status. First-quarter shipments totaled 939,900 tonnes. India has increased its purchases of competitively priced Chinese PP grades.

However, market participants express concern over the sustainability of the current rally. China is scheduled to add 5.45 million tonnes of new PP capacity in 2026, with most coming online in the second half. If the Strait of Hormuz reopens before this capacity is operational, the market could shift rapidly from tightness to a sharp downside correction.