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In China, futures prices on Dalian Commodity Exchange recorded three digits gain just on the first trading day of the week. Contract 1701 for PP surged CNY160/ton ($24/ton) to settle at CNY7993/ton ($1009/ton without VAT). LLDPE contract rallied CNY170/ton ($25/ton) to reach CNY9610/ton ($1213/ton without VAT).

Domestic spot offers for both PP and PE, one more time, delayed responding to the firming futures trade as supplier keep their price list stable from last week. It is reported that buying interest for LDPE film hold very strong and buyers have accepted offers at the upper end of the overall price range in bid to avoid production disruption. The restart of major domestic LDPE film plants has yet to ease the supply tightness. On the other hand, both new coal-to-polyolefins plants started up since late September 2016 have achieved on-spec cargoes and material shall arrive the market by early November 2016, players said. This has kept PP buyers very cautious and many converters have expressed their intention to stick to hand-to-mouth purchasing strategy.

In the import market, traders are attempting to keep the PP offers on the firming track by increase their offers slightly, believing that expected tightening supply from international supplier might provide strong support. Import PE also experience similar situation as in domestic ground. A trader informed, “We visited our customers in the agriculture sectors recently and good news is most of them are operating at high rate. On an average, these buyers only keep 7-10 days worth on inventories. Therefore, we see very positive outlook for LDPE film in the near term.” The HDPE film market, however, remain under pressure and attempts to increase prices have all yielded disappointing results.

In Southeast Asia, market sentiment appears to have some improvement on the first trading day of the week, which many players believed to be the spill-over effect from healthy demand condition in the nearby China market. Demand pick-up visible in the PE market though sellers continue seeing difficulties in applying increases. An Indonesian trader said, “We received good purchase inquiries from domestic buyers for LLDPE film, just that buyers only accept prices at the lower end of the overall prices range. With ethylene costs soften recently, we really doubt the possibility of a firming trend.”

Meanwhile, Vietnamese players also reported a sudden pick up in LDPE film demand after witnessing impressive price hike in the nearby China market. Domestic traders have in fact lifted their offers by VND500,000-700,000/ton ($22-31/ton) compared to last week with a trader commented, “Domestic ground here started to feel the impact of strong demand in nearby China market, hence many people are searching for material in anticipating further increases. We sell LDPE film very well today while other grades are just normal.”

For this, couple of major Southeast Asian producer has implemented $30-50/ton hike on their LDPE offers to regional buyers, though initial market respond towards the new offers is not as positive as expected.

In contrast, a major Middle Eastern PE producer has also announced November delivery offers to Vietnam with $20/ton reduction on LLDPE film while keeping HDPE film prices unchanged from last month. In spite of the price cut, the maker’s latest offers for LLDPE film remains above the $1200/ton threshold. A buyer bid for another $20/ton discount on deal commented, “We think this is acceptable level (after the discount) considering the current costs and demand condition. We are not prepared to accept offers above the $1200/ton mark at the moment.”

Regional PP market has yet to see fresh offers from international major suppliers with buyers expect to see limited supply from Middle Eastern and Indian makers due to the upcoming shutdowns. Only couple of Southeast Asian and Far Eastern makers open new offers at $10-40/ton increased. Commenting on the latest price opening, a woven bags maker in Indonesia said, “We are about to enter the off-peak demand season, hence we might not be able to accept such large price increment. We might discuss with our suppliers for discounts, meanwhile, we might source some cargoes from domestic market given the competitiveness.”