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In China, futures market remains weak though the extent of reduction is smaller. January delivery contract for PP inched CNY12/ton ($2/ton) to reach CNY8848/ton ($1151/ton without VAT). LLDPE contract slipped another CNY25/ton ($4/ton) at CNY9665/ton ($1257/ton without VAT).

Trading activities in domestic spot market remains sluggish, as buyers are cautious about making replenishment amid softening market trend. More price cuts are anticipated to emerge in the coming days as local producers attempt to deplete cargoes before entering the long holidays, which might cause a drastic jump in inventories levels.

A converter in packaging and daily product informed, “We might still need to make another purchase by early next week. Delivery might become an issue approaching the holiday. Local producers are offering several discount schemes and we hope to obtain better prices in the coming days. Demand for our end product is healthy.”

In the import market, after PP trader slashed offers in the previous session; several other PE traders take similar step today. On an average, import PE offers to China has edged $30-40/ton lower week on week for specific origins, including Saudi Arabia, Qatar, Iran and Thailand. However, these moves are solely from traders. Players commented that such adjustment is necessary as import PE offers nearing the $1300/ton mark are ways above acceptance level. “Market has to come back to the realistic levels, especially with local market loosing momentum since last week,” a trader said. The source reportedly cut offers for Thailand HDPE film and yarn by $40/ton from official price list, to $1250/ton CFR China, LC AS term.

In Southeast Asia, the general sentiment is calmer than usual despite overseas suppliers started or planned to offer October shipment cargoes with increases. Regional buyers are taking side-line to monitor further development in the near-by China market before making decision.

A Saudi Arabia producer lifted HDPE and LLDPE film offers to Indonesia in the previous session to $1230-1240/ton, CIF Indonesia, LC AS term is now facing stiff resistance from buyers. A distributor reported, “End product buyers are unable to accept the current prices, hence converters are slowing down on replenishment. Our regular customers are very reluctant in even placing bids.”

Similar situation is observed in Vietnam, where buyers are placing bids at $60-70/ton below the offered prices to conclude a small quantity. “The cargoes would only arrive in December and we have limited confidence in the near term outlook. Local market is weak, therefore we are not planning to accept anything above the $1200/ton threshold, especially when China market is slowing down,” a Vietnamese buyer commented.

Despite such demand condition, overseas suppliers have not shown the tendency to adjust offers to match the market, instead holding firm stance pointing to strong upstream costs and bright prospect ahead. “China market would enter the traditional high demand season after the National Day holiday, hence we think that market would be healthy in October too,” a producer commented.

There are little movement in the regional PP market, yet suppliers started feeling the spill-over effect from slowing China market. Further price hike does not appear to be possible at the moment and many are hoping that tight supply condition could prevent market from falling. A regional trader said, “Sentiment across the markets seems heavier this week. We expect prices to follow mostly stable trend in the coming week with no major shift in the direction.”

Converters are not sharing the same opinion, hoping that slower demand in China would bring along some discounts in Southeast Asia market. “Prices hit the peak and we are waiting to make additional purchases. Chinese buyers might come back from National Day holiday to replenish inventories, hence the window is not big,” a Vietnamese buyer commented.