Faltered buying interest insulated firming trend in Asia PP market

After two months of continuous rally, the bull in the Asian PP market appears to be taking a break this week with buyers across the region reported concluding deals with larger discount compared to last week. 

In fact, buyers in Vietnam received offers for Middle East homo-PP at $1110/t based on CIF, LC AS term earlier this week and managed to conclude deal at $50/t discount from initial offer. A buyer commented, “We have purchased some cargoes last week and we prefer to wait a while before making another replenishment. We hope this is not a serious sign of a market direction overturn since supply is still pretty tight and demand in European market remains healthy. Yet we are not expecting any further price increment in the near term with the current weakening local market.”

In China meanwhile, stiff buyer’s resistance finally take its claim on market prices. A trader in Guangzhou elected to cut his offers for Brazilian homo-PP by $30-40/t to sell off the cargoes at $1010/t CFR China, LC 90 days term. The source added, “We have maintained this offer level for over two weeks and couldn’t attract any buying interest. We thought the market could have already peaked out. We are a bit concern about the presence of several irregular origins in PP auctions these days, hence we are not very confident about the near term outlook.” Other sellers on the other hand retain a very firm stance on their cargoes.

One of the hottest markets in the region over the past months – India, is also reporting weaker sentiment dragging down by lack of buying interest. Despite not seeing any obvious flip in market trend, buyers witness a more willingness to give discount from suppliers. A trader commented, “We received offer for Iranian homo-PP at as high as $1070/t CIF India last week; however, there is already $40/t discount for this week deal and our suppliers are willing to adjust more if we are ready to pay 30% TT in advance. Buyers are now on the side-line waiting to see clearer trend.”

There are several PP plants in Far East region undertaking scheduled turnaround, which is expected to grind out support to the market. However, buyers appears to have insufficient confidence in the outlook coming months.

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