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In China, futures market concluded the final trading day of the week at lower levels compared to the previous sessions. May delivery contract for PP inched CNY59/ton ($9/ton) lower to reach CNY8142/ton ($1010/ton without VAT). LLDPE contract meanwhile slipped CNY95/ton ($14/ton) to close at CNY9260/ton ($1149/ton without VAT).

It is reported that purchasing activities in domestic spot market remain unaffected by the weak futures trading and private data showed that total PP and PE inventories at major local producers’ warehouses have reduced by approximate 92,000 tons from last week. This condition is expected to persist in the coming week as China would officially off for Tomb Sweeping Festival on 3-4 April. A trader commented, “We think players would have to stock up some quantity before the holiday, which makes the outlook for the coming week bright.”

In the import market, Middle Eastern PP suppliers have stepped back on their homo-PP prices to China as prices above the $1100/ton threshold faced stiff resistance. A number of deals for import homo-PP from Saudi Arabia are reported in the range $1045-1060/ton CFR China, LC AS term. A trader purchased the cargoes at $1050/ton, some $70/ton discount from initial prices said; “We only procured a small quantity to avoid any supply disruption in the coming month. At the moment, local materials are still more competitive, hence buyers are not very interested in import cargoes.”

International suppliers continue to report improving sales for LDPE film to China, which encourages intention to implement some price hike in the coming week. A Middle Eastern maker said, “We have sold a considerable quantity of LDPE film to China this week and today we have withdrawn the offers.” Similar comment come from a major Thailand producer, with the source added, “We are not having much allocation due to the up-coming maintenance shutdown. We think the current demand condition is supportive enough for firmer level next week.”  

In Southeast Asia, more international suppliers announced April shipment offers to the regional mostly with reduction from last month. However, buyers across the region remain on the wait and see stance as new prices have yet to meet their expectation.

An Indian producer reportedly slashed homo-PP prices by $40/ton from last week to Vietnam, reaching $1100/ton CIF, LC AS term. Initial respond from Vietnamese buyer is not very positive as most are awaiting further reduction before replenishing additional quantity. A distributor offered on behalf of the producer said, “At the level $1080/ton many buyers have made their purchases last week and at the moment waiting for another round of reduction to buy additional quantity. Therefore we are not seeing much respond toward the latest offers.” The producer, on the other hand, refused any large discount pointing to the lack of inventory pressure.  

Meanwhile, a Saudi Arabia producer cut homo-PP offers by $80/ton month on month basis to Indonesia at $1100/ton CIF term. Couple of buyers in the country attempted to bid at $1080/ton to make purchases, yet got rejected. Explaining to the firm stance on the cargoes, a producer source informed, “This month we are not having large allocation as our plant just resume operation. Indonesian buyers are placing bids at well below the offered level, however, we might monitor further before making any decision.”

The refusal of any additional discount in spite of sluggish demand condition and weak upstream costs has had buyers thinking that market might be nearing the bottom. “However, we are in no rush to take position and might monitor further movement in the coming week before making decision,” a regional buyer added.

In the PE market, April delivery offers from couple of international suppliers have also softened slightly and yet buyers are not showing much interest. A Saudi Arabia producer offered PE prices in the previous trading day to Vietnam has reportedly concluded prices at $50/ton discount for LLDPE film and $30/ton reduction for HDPE film from initial offers reaching $1170/ton and $1160/ton respectively, all based on CIF Vietnam, LC AS term. A distributor informed, “Several converters have confirmed orders at the discounted prices, however, local traders are still reluctant.” However, this price is expected to set as a benchmark for Middle Eastern PE cargoes in the coming days.