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In China, futures market regains some strength toward the end of the week with May contract inched CNY11/ton ($2/ton) higher from the previous session to close at CNY9088/ton ($1134/ton without VAT). LLDPE contract also added CNY20/ton ($3/ton) to reach CNY10220/ton ($1275/ton without VAT).

Purchasing activities in local market is fading as per expected and traders concluded deals are now facing difficulties in arranging delivery. Local producers therefore turn to offer cargoes for post-holiday delivery at CNY200-300/ton ($29-44/ton) below the current market levels to secure orders, yet the cargoes off-take rate remain weak. A trader in Shanghai described the situation saying, “Most logistic companies are no longer taking orders for this week delivery. Imported cargoes are piling up in Shanghai port causing congestion here. We expect the situation to worsen in the coming week.”

In the import market, a major Saudi Arabia producer announce official homo-PP offers to China at the level $1050/ton CFR, LC AS term, which is slightly softer than previous month. It might be difficult to lure buyers into active price bidding at this point of time, players said, yet limited allocation could lend a supportive hand in keeping prices firm. A Zhejiang based distributor said, “Our supplier only have 2000 tons allocation this time, which is 30% below regular quantity due to the ongoing plant shutdown. Besides, we believed that the supplier has achieved better margin elsewhere as China is at its low time now.”

In the PE market, major Thailand maker down adjusted their PE offers to the country by $10/ton for HDPE film and $5/ton for LDPE film compared to initial prices given yesterday. Players commented that such move confirmed the sluggish buying interest and in order to close deal, more discount must be made available.     

In Southeast Asia, more regional and international suppliers announce February offers today with increases compared to last month in the face tightening supply, especially for LDPE film. Regional players reported receiving fresh LDPE film offers from various origins with the hike range stands at $40-100/ton. An Indonesian buyer was offered Qatar’s LDPE film at $1320/ton CIF, LC AS term said, “Price have surged three digits from last month and this is really out of our expectation. We are negotiating for discounts as our end product customers are not accepting such hike.” Meanwhile, domestic LDPE film offers continue to gallop higher on the support from international ground to reach IDR 19,450,000 ($1450/ton) without VAT, FD Indonesia cash term.     

On the other hand, the shutdown at Qatar Petrochemical Company (QAPCO), Lotte Chemical Titan and Formosa Chemicals & Fiber Corp (FCFC) might prune regional LDPE supply to a certain extend in the coming month. Suppliers therefore believe that prices are there to stand firm.

Vietnamese buyers seem less interested in import LLDPE film cargoes priced above the $1200/ton threshold while it does not appear that sellers would slash their offers too steeply from initial prices. “We placed bid for Saudi Arabia’s LLDPE film at $1180/ton in the previous trading session and it become clearer that our suppliers might not accept the bid now. We hope that firming import offers would stimulate the local market in the near term.”

The PP market continues to escalate on the back of tightening availability. A number of regional buyers have reportedly purchased longer stock in anticipation of persistent firming trend in the near term. In Indonesia, non-dutiable cargoes at the prices $1150/ton and below are no longer available in the market and Thailand’s homo-PP jumped to above $1200/ton levels this week. A converter commented, “We don’t think customers are able to accept such rapid price increment yet, since local material are offered at the similar levels now. Looking ahead, market seems to have some room to increase further.”

In related plant status news, Saudi’s Rabigh Refining and Petrochemical Co (PetroRabigh) has encountered an unspecified technical issues today, forcing the company to undertake emergency shutdown at all PP and PE units. The restart date remains unconfirmed.