Asian polypropylene producers are trying to move more cargoes to the South American and African markets as arbitrage opportunities open, market sources told Platts this week.
"The South American market is better than the Asian market," said a South Korean producer.
He noted that he was able to sell PP block copolymer to South America at $1,700/mt FOB South Korea, but found it hard to move cargoes at a similar price level on a CFR China basis.
Another Taiwanese producer agreed, saying that cargoes moving to South America and the African continent can fetch up to $1,700/mt FOB Taiwan for PP block copolymer and $1,600/mt FOB Taiwan for PP homopolymer.
"Why should we sell at lower prices into Asia, when we can get higher prices on a FOB basis to these regions," said a Taiwanese producer, who reported sending 10% more cargoes to both regions this month.
A Malaysian producer said he "will try" to move cargoes to both regions as well due to the better demand and prices there.
Discussions for PP appeared to be weak in recent weeks especially in the Chinese market, say market sources, as participants took a wait-and-see stance amid the lack of demand and rising feedstock costs.
PP-raffia/injection was assessed by Platts at $1,545/mt CFR Far East Asia Monday. In Latin America, the weekly assessment for PP homopolymer was $1,725/mt Free On Truck Brazil and $1,715/mt CFR Peru. There is no Platts assessment for the African markets.
