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In China, futures market still traded on weak note despite a small hike in September delivery contract for PP. LLDPE futures continue to loss CNY30/ton ($4/ton) day on day basis to close at CNY8580/ton ($1064/ton without VAT). PP contract edged up CNY20/ton ($3/ton) to reach CNY7553/ton ($937/ton without VAT).

There is still no improvement in term of buying interest in local market and persistent soft futures ground encourages additional CNY50-100/ton ($7-14/ton) discount for both PP and PE from traders. “Inventories are floating in the distribution market mostly as converters are not keeping high inventories due to slow end product businesses. Being active in the export market could be the best solution at the moment,” a trader said.

In the import market, import homo-PP offers below the $1000/ton threshold are becoming more popular this week though most Middle Eastern suppliers are still keeping prices in the range $1000-1050/ton CFR China, LC 0-90 days term. A trader agreed to $20/ton discount on USA homo-PP yarn to conclude deal for 400 tons of material at $950/ton CFR China, LC AS term said, “We have been trying to hold our cargoes over the past month, yet unable to deplete the cargoes. Many other traders are also in need to improve cash flow, and therefore we think that room for further reduction is still available.” This is expected to exert additional pressure on other mainstream cargoes in spite of limited supply for these origins.

In the PE market, a major Saudi Arabia producer cut LLDPE film offers by $30/ton from last week to $1150/ton CFR China term. Players attributed such price decision to the pressure from deep-seas LLDPE film cargoes, which are traded mostly at below $1100/ton mark this week. “Offers for non-dutiable cargoes have also retreated to lower levels. In addition to ample domestic supply, we think it is hard for import market to hold ground. Just that the reduction pace might be slow in the near term,” a Chinese buyers commented.   

In Southeast Asia, several regional and overseas suppliers have announced May shipment offers for both PP and PE at stable to softer levels compared to initial offers given in the previous month. Regional buyers are expecting further discount to emerge on deals given improved supply from Middle Eastern suppliers, especially for PE, while demand remains lacking momentum.

A Saudi Arabia producer cut offers by $50/ton for LLDPE film to $1170/ton, $30/ton for HDPE film to $1160/ton and $40/ton for homo-PP to reach $1080/ton, CIF Vietnam, LC AS term. A distributor offered on behalf of the maker informed, “Allocation this month has improved visibly as our principal supplier achieves stable production. And in spite of the fact that demand has not shown any up-tick recently, we are not expecting any drastic reduction in prices when it comes to closing deals. At the moment we are collecting bids from customers and would finalise prices later.”

Meanwhile, a major Southeast Asian producer has also down adjusted PP and LDPE offers to the region, though the extent of price reduction is well below market expectation. In fact, homo-PP prices only see $10/ton month on month reduction to $1180/ton while LDPE film received $20/ton cut to reach $1390-1400/ton CIF Southeast Asia/DAP Malaysia, LC AS term. A buyer commented, “We think the supplier might have to offer additional discount to attract deals in spite of the current plant shutdown. Couple of other suppliers in the region are giving more competitive prices while demand is not very strong. We prefer to take conservative stance at the moment.”  

In the PP sector, the import homo-PP market in Vietnam is still under the strong influence of the widely available Chinese origin cargoes at competitive prices. Buyers in the country generally share the same expectation that room for further reduction in the PP market is still presence. A converter said, “Multiple factors are underlining the possibility of softening trend ahead. With China market remain sluggish and softening propylene costs, we adopted wait and see stance.” In contrast, local homo-PP prices in Vietnam hold largely stable.

In Indonesia, domestic producer announced fresh weekly prices with $10/ton reduction reaching $1200/ton FD Indonesia, cash term. However, actual deals are well below price list, player said. “Import offers are still unable to compete with local cargoes as we managed to conclude deal for domestic material at $1160/ton FD Indonesia, cash term today,” a buyer reported.