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In China, thanks to strong energy market, future prices continue to increase. Most actively traded contract for May delivery leaped another CNY179/ton ($26/ton) for PP and CNY145/ton ($21/ton) for LLDPE. Both contracts settled at CNY8498/ton ($1056/ton without VAT) and CNY9545/ton ($1186/ton without VAT) respectively.

Most PP and PE offers in local spot market firm up by CNY50-100/ton ($7-15/ton) from yesterday, except LDPE film drop another CNY100/ton ($15/ton), signaling the weakness of this grade. It is reported that trading activities are better as firmer energy and futures market encouraged buyers to make replenishment.

In the import market, major USA homo-PP suppliers suspended offering claiming to have sold out available quantity. Market is less intense with the absence of this origin since its low prices have been pressurizing the sentiment in the past two weeks. Traders carry more positive view about the near term outlook with the support from the crude oil prices. A trader offer Saudi homo-PP at $1010/ton CFR China said, “We think market is heading for stabilization and depending on the sustainability of the firming trend in energy and futures markets, PP suppliers shall attempt to up adjust their offers.” Even homo-PP priced at $1000/ton is becoming limited in China market today.

While USA homo-PP offers are not available toward the end of the week; USA PP block copolymer and PE cargoes remain ample in the market. Many have projected that converters might make pre-Chinese New Year stocking earlier than expected this year if energy and futures market remain firm in the coming week.  

In Southeast Asia, the general sentiment continues to improve after energy market soar to multi months high; however, the number of new offers is rather limited, especially for PP. Vietnamese buyers reported that homo-PP prices at the $1000/ton market observed earlier this week are now no longer available with suppliers have either sold out or withdrawn their offers. A woven bag manufacturer said, “We have checked with several Middle Eastern suppliers and receive nothing below the $1010/ton level.” Sellers here appear to be more confidence about the near term outlook with an international trader informed, “We have concluded the final batch for Saudi homo-PP yarn at $1000/ton today while our Indian supplier have withdrawn their offers. We think prices are unlikely to move lower in the near term at the current energy market. Local traders are still reluctant to make replenishment; but converters are no longer hesitating about their purchases.”    

In contrast, import homo-PP to Indonesia continues to move lower, especially from Southeast Asian suppliers. In fact, players reported receiving Vietnamese homo-PP at $1090-1100/ton CIF Indonesia, some $30-40/ton drop from last week with a buyer informed, “We need to take into account the weakening Indonesia rupiah when buying from import market. Our supplier is only willing to give $10/ton discount on deal and we are considering this buy.”

Import PE to the region remains mostly unchanged from the previous trading session and interestingly the general sentiment does not seem responding strongly to the energy market. Prices at the upper end of the overall prices range continue to face stiff resistance as buyers hold conservative stance over the near term outlook. Major Middle Eastern producer is reportedly offering up to $30/ton discount from initial prices for LLDPE film cargoes to conclude deal at $1180/ton CIF Vietnam, LC AS term, yet buyers are not very aggressive in scouting the material. With the falling LDPE film prices in near-by China market, Southeast Asian players are showing concern over the near term outlook for PE market.

On the other hand, local PE prices in Malaysia increased significantly in spite of mediocre demand condition, which is mainly due to the currency depreciation. New offers for HDPE film and LLDPE film indicated approximate $70-80/ton increased from last month. Converters in the country are stuck in the pincer of high raw material costs and slow end product business, which is considered as unhealthy for the sustainability of the current trend.