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In China, futures market concluded the final trading day of the week on soft notes. September delivery contract for PP and LLDPE both loses steam, slashing CNY64/ton ($9/ton) and CNY100/ton ($14/ton) respectively. PP contract close at CNY8026/ton ($994/ton without VAT) and LLDPE at CNY9130/ton ($1131/ton without VAT).

Domestic spot market sees little changes from the previous trading day as most players are entering holiday mood. Chinese players will be officially off on 29 and 30 May for Dragon Boat Festival. Market will resume on 31 May. A trader offers CNY50/ton ($7/ton) discount on both PP and PE cargoes said, “Pre-holiday replenishment activities are rather disappointed as buyers have already purchased sufficient material in earlier week. However, this could make post holiday market condition brighter. Therefore, we are not in rush to make significant adjustment.”

In Southeast Asia, market appears to be calmer on the final trading day of the week with PP and PE market clearly following diverged direction. Propylene costs in Asia has been following the firming trend for nearly three weeks in a row, accumulating a total increase of $60-90/ton compared to early May 2017. This, in addition to improving PP demand across the region, has created a very conductive condition for suppliers to implement hike on their offers.

An international trader selling Saudi Arabia homo-PP to Vietnam said, “We skip offering this week as market seems on firming trend. Despite the plunge in energy values, we do expect small to moderate hike in import homo-PP offers in the coming week.” Vietnamese buyers are widely expecting higher offers in the near term, though many expressed cautious stance as propylene supply might ease after regional crackers completed maintenance work.

In Indonesia, as major Singaporean and Thailand producers claimed to have sold out available quantity in the previous trading day, Philippines supplier is also not having much quantity left. Meanwhile, a Saudi Arabia maker keep offer unchanged compared to mid of the month, at $1065-1070/ton CIF Indonesia, LC AS term. A buyer in the country said, “End product demand in Indonesia is very weak at the moment, yet buyers still replenished material as market seems rebounding. We have purchased some quantity and would prefer to monitor if other market in the region can accept higher prices before making next move.”

In contrast, ethylene costs in Asia continue to drop on increasing supply and sluggish downstream demand. This has had buyers hold back on their purchases, hoping to obtain additional discount in the near term. A Saudi Arabia producer decided to step back on their PE prices by $20/ton after refusing any discount from initial offers in the previous trading day. In the latest announcement, the producer finalized prices at $1120/ton for HDPE film and $1130/ton for LLDPE film, all based on CIF Vietnam, LC AS term. A buyer commented, “We plan to wait until next week before making decision as we have purchased other origins at more competitive prices. We think there must be more discount in order to draw buyers back to the market.”