Print

In China, futures prices on Dalian Commodity Exchange edged up slightly on the first trading day of the week. Most actively traded contract 1701 for PP added CNY53/ton ($8/ton) to close at CNY8478/ton ($1055/ton without VAT). Same contract for LLDPE surged up to CNY175/ton ($25/ton) from last session to reach CNY9565/ton ($1190/ton without VAT).

In domestic spot market, buyers are again running low on inventories, as many have skipped purchases in the previous week, which stimulated replenishment activities, especially when suppliers are offering CNY50/ton ($7/ton) discounts. Except for LDPE film, price reduction stand at CNY200/ton ($29/ton).

Traders reported to have closed better number of deals for PE than PP today with a market source said, “The PP futures is just too volatile these days, causing customers to take very conservative stance over the near term outlook. We offered small discount on deals for PP but customers are not having great appetite.”

In the import market, the LDPE film fever is now over. Couple of international suppliers opened fresh prices to the country at $20-50/ton reduction from last week. A major Thai producer down adjusted their LDPE film offers by $20/ton to reach $1380/ton CFR China, LC AS term after two weeks of holding steady on their cargoes. A distributor offered on behalf of the producer informed, “Demand slows down significantly as the peak seasonal demand for LDPE film is coming to an end. Even with this reduction, our regular buyers are not showing much interest. We think market might continue to gallop lower moving into December once previously purchased cargoes arrive to the market.” Other traders have also cut their offers for Middle Eastern LLDPE film by $10-20/ton compared to last week to attract buying interest.

Import PP to China remain mostly unchanged from last week, however, the lower end of the overall prices below the $1000/ton threshold has not repeated on the first trading day of the week.   

In Southeast Asia, market see little changes in term of demand on the first trading day of the week though couple of regional producer announced December delivery offers at higher levels compared to last month. In fact, major Southeast Asian maker lifted PP prices to the region by $20/ton from last month while LDPE cargoes witness some $50/ton increased. A distributor offered on behalf of the producer informed, “The PP market is surprising weak in spite of the maintenance shutdown season. On the other hand, our principal supplier is very optimistic about LDPE demand, especially in China, as the preparation for Chinese New year order would continue to keep the market on the firm note.”

Meanwhile, in Vietnam, Middle Eastern PE suppliers opened new prices last week are facing difficulties in achieving healthy number of deals despite discounts are given. Most buyers are pointing to the depreciation of the Vietnamese dong and the subdued local demand to be the main factor discouraged fresh purchases. A trader who received $30-40/ton discounts on Saudi’s cargoes at $1180/ton for LLDPE film and $1120/ton for HDPE film, CIF Vietnam, said, “We normally take about 300 tons from our supplier, however, this month we only purchased one container. We think this price is a little too high, considering the availability of USA cargoes at much more competitive levels. We have sufficient stock on hand, therefore, plan not to making large buy at current market levels.”  

On the other hand, producers appear to be having low pressure to commit larger price cut expecting demand to pick up in the near term. This tug of war might remain in place in the near term, yet many have expected the PE bear to overtake the situation.

There are very limited numbers of new PP offers observed in the market, however, prices at the upper end of the overall price range started to feel the pressure. Indeed, it is reported that Thailand homo-PP is offered at $1135/ton to selective Indonesian converters today, which is about $65/ton below official price list given previous week. A buyer received the offer commented, “As most Southeast Asian PP plants are set to resume operation after the maintenance shutdown, suppliers bump into persistent weak demand condition. We think, further discounts are very possible, hence we prefer to hold wait and see stance.” The source also reported to have received Middle Eastern homo-PP at $1040/ton CIF Indonesia, LC AS term.

Several other woven bag converters in Indonesia are complaining about the lack of end product orders from both local and overseas customers, and to make the matter worse, end products cargoes are being asked to be delivered later than initial schedule. A buyer informed, “Shipment for some of our end product cargoes must be adjourned up to a month, therefore, we are not planning to keep high inventories to avoid cash flow risk.”