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In China, futures market continues to gallop the uptrend with September delivery contract posted additional gain from the previous session. PP futures edged CNY36/ton ($5/ton) higher reaching CNY8499/ton ($1073/ton without VAT). LLDPE contract increased CNY115/ton ($17/ton) to settle at CNY9660/ton ($1220/ton without VAT).

Without sales pressure and strong support from firming futures trading, local suppliers lifted spot offers for both PP and PE by another CNY100-150/ton ($14-22/ton), marking five straight gaining sessions. However, trading activities are not as active.

In contrast, import ground see drastic pick up in the number of transaction, mostly at higher levels week on week. A trader sold 990 tons of Iranian LDPE film at $1170/ton CFR China, TT in advance term said, “Many converters are returning to make replenishment, therefore we lifted offer by $55/ton from last week. We did not expect market to accept the hike, and to surprise, we manage to deplete the cargoes so easily.” Several Iranian HDPE film cargoes are concluded at $45/ton increased at $1125/ton with the same term.

Another trader reportedly sold 1000 tons of Indian LLDPE film and HDPE yarn at $1060/ton and $1090/ton respectively, all based on CFR China, LC AS term said, “Local trader enter deals without much hesitation as near term outlook appear to be possitive. We think prices might continue to firm up in the near term.”

Import homo-PP does not share such high acceptance. Latest import offers for Saudi Arabia and Indian origin cargoes indicated approximate $60-70/ton increased week on week, reaching $1065-1090/ton CFR China, LC 0-30 days term. A buyer in Southern China area received Saudi’s homo-P yarn offers at $1090/ton said, “This is too high even though market is improving. We only can accept at around $1020/ton with the same term.”

In Southeast Asia, market activities dropped on the final trading day of the week as suppliers hold back on their cargoes, hoping to achieve better margins in the coming week. Meanwhile, several traders have attempted to lift PE prices, though no deals have been reported at the adjusted levels.

Vietnamese buyers are complaining about the rapid hike seen on Thailand HDPE film cargoes with a market source said, “Traders lifted prices by $35/ton day on day, which we find it difficult to accept at the moment. International sellers might announce August shipment offers next week, and it is likely that prices below the $1100/ton threshold might vanish.” There have been several deals for Indian LLDPE film at $1045/ton CIF Vietnam, LC AS term, and buyers fear that these orders might be cancelled, as market is moving up.

Despite the obvious firmer trend observed in Asia, Southeast Asian buyers do not appear to be in rush to make additional replenishment as usual. Instead, market remains very calm and players mostly prefer to adopt passive stance of wait and see. In contrast, international producers raise intention to push forward for price increment. A Saudi Arabia producer said, “We might announce August shipment offers by mid of next week. Due to plant issues, we are not having much quantity this month while inquiries from Chinese buyers are good, we plan to lift HDPE and LLDPE film prices to above the $1100/ton threshold.”

The regional PP market sees fewer new offers as suppliers claimed to have sold out available quantity and might apply additional increases in the coming week. An international trader sold Saudi homo-PP yarn to Vietnam at $1075/ton, CIF, LC AS term, a $5/ton discount from intial offers. A source close to the trader added, “We have diverted a considerable quantity to Indian Subcontinent market given better profit margins. Vietnamese buyers are not very receptive towards the new price levels, hence we think there might be a cap on any possible drastic hike.”

Overseas sellers meanwhile are facing difficulties in lifting import offers to Indonesia amid competitive prices from local traders. This might encourage seller to redirecting available quantity to other markets where margins are better.