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In China, PP futures on Dalian Commodity Exchange continue to rally today, adding CNY128/t ($20/t) to yesterday’s gain to settle at CNY6793/t ($889/t without VAT) for May delivery contract. LLDPE futures posted a minimal gain of CNY5/t ($0.8/t) to reach CNY9030/t ($1182/t without VAT).   

Firming futures trading has not only facilitated traders in introducing another CNY100/t ($15/t) increase in spot offers for PP and PE in local market, it also encouraged sellers to be firm on their prices. A trader in Zhejiang said, “We maintained our offers for PP and PE stable at the first half of the trading day, however we lifted prices by CNY100/t ($15/t) later on. We expect the market outlook for March to be strong as healthy demand would digest most of the stock, freeing sellers from sales pressure in the coming weeks.”

In the import market, HDPE film cargoes appear to have better number of deal concluded today with Saudi Arabia and Kuwait origins reported at $1060/t and $1090/t respectively, based on CFR China, LC 90 days term. A trader in Shanghai said, “There is a large volume of cargoes arrived to the port now, however, sellers are not in rush to depleting stock by giving large discount, instead they are very firm on their prices wit the support from higher monomer costs. We see most deals concluded at the higher end of the overall range are in small quantity and this trend might sustain in the near term.” Players are also complaining about tight supply for Singaporean LLDPE film stemming from a stubborn production issue at the producer’s plant.

In Southeast Asia, sentiment remains very firm and most of the PE sellers claimed to have completed transactions for their March delivery allocation, especially for LLDPE film cargoes. A

distributor sold Middle East LLDPE film cargoes at $1150/t CIF Vietnam said, “We have very limited allocation this month hence we sold out quickly right after we open the offer. We think the PE market would sustain the firming trend in the coming month due to higher production costs.” Another buyer added that he has been seeking for LLDPE film cargoes from several suppliers, however there is no allocation available. This week, there is an increasing number of Iranian and North America HDPE cargoes being re-exported from China to Vietnam at relatively competitive price.

The PP market recorded significant hike with one of a major Thailand producer announced new prices to Indonesia with $90/t increased compared to last month. A buyer commented, “This new offer is too high at the moment but we do not feel surprised as the supply has been tight since before Chinese New Year holidays. We have replenished sufficient material till May, hence we are not planning for additional purchase at the moment.” At the mean time, converter in Vietnam procured Singaporean homo-PP yarn and injection at $950/t CIF, LC AS term added, “With this purchase, our production is covered till end of April and we will need to monitor the market further before making additional move. Local market is now slower than at the beginning of the week as buyers are waiting for previous cargoes to arrive next week.” Many players have expressed their concern over the speed of the downstream market’s upward movement compared to the monomers cost’s. 

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