The Chinese market for commodity resin polypropylene has seen a cumulative decline of 35.26 percent to date this year.
That's according to a latest report from China-based commodity pricing provider Sci99.com.
The company measures the trend with PP T30S prices in the Yuyao plastics market, which once rebounded to 9,500 yuan ($1,466) per metric ton in March and April but have been continuously sliding since May to as low as 6,150 yuan ($949) per metric ton.
Besides the obvious factor of bottomless oil prices, the report also blames the sluggish demand from downstream plastics processors.
The average capacity utilization of injection molders stands at 52 percent, compared to 60 percent last year. BOPP film makers also reduced their capacity utilization from about 65 percent in 2014 to 59 percent this year. Another major user of PP resins — plastic woven products manufactures also reported a drop of capacity utilization rate from 72 percent last year to 62 percent in 2015.
Furthermore, some medium-and-small-sized molders have shut down production or gone out of business, thanks to the slowing global economy and China's “new normal” economic environment.
Traditional peak seasons have almost “disappeared”, the report added.
All in all, despite the limited addition of new PP capacity in 2015, depressed downstream demand is weighing on the resin market.