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CHINA

• Domestic inventory continue to fall, signal steady demand condition
• Import offers rise on limited supply

Polypropylene (PP)

Total PP and PE inventories at domestic producers’ warehouses fell another 15,000 tons to 565,000 tons as of 18 January 2018, signaling the steady demand condition despite weak futures market. While supply for homo-PP injection in domestic ground has been tight for several months, buyers started complaining about difficulties facing in sourcing yarn cargoes, too. “It does not seem like prices are coming down. Most of our suppliers are unable to delivery large quantity of homo-PP yarn cargoes, hence we might need to purchase continuously in the coming week to ensure undisrupted production rate,” a woven bag manufacturer informed.

In the import market, Indian and Saudi Arabia homo-PP reaches $1235-1240/ton CFR China, LC 0 – 90 days term with deals for Saudi cargoes reported with no discount. “However, it is becoming harder to attract purchasing interest as buyers are very concern about the medium term outlook. We are not seeing any strong factor that could drag market lower at the moment, especially when demand in other markets remains strong,” a trader said.

Polyethylene (PE)

Import PE to China firmed up visibly from the previous week, with prices below the $1200/ton threshold have not repeated for all PE cargoes. “Even for LLDPE film, overseas sellers have lifted prices considerably. We are considering to purchase a small quantity of Saudi LLDPE film at $1205/ton CFR China, LC AS term as the firming trend might spread into February,” a buyer said.

In domestic spot market, traders are reporting steady sales result with a discount of CNY50/ton ($8/ton). A number of converters are keeping stable operating rate until 10 February 2017 before going off for a week-long Lunar New Year break. “Which mean, pre-holiday replenishment activities might be on for longer than initial expectation. We are willing to bet on a bullish outlook,” a source added. 

SOUTHEAST ASIA

• Import PP market remains firm, buying interest weakened
• Overseas sellers indicate hike intention on February PE cargoes

Polypropylene (PP)

Major Saudi Arabia producer lifted import homo-PP offers to Vietnam by $60/ton from earlier this month to $1260/ton CIF Vietnam, LC AS term. However, buyers, especially local traders are not showing strong interest in making replenishment at the moment, instead prefer to rely on the existing stock. “Prices are too high at the moment and arrival time is too far. We might only buy a small quantity this time,” a trader said.

Local distributors in Indonesia are offering discount of IDR200,000/ton ($15/ton) on homo-PP yarn cargoes, while there are very limited availability for injection grade. As a result, Indonesian buyers are not convinced on the sustainability of the firming trend in spite of evidently higher offers across the region.  

Polyethylene (PE)

Most other suppliers have yet to announce February shipment offers to the Southeast Asia, however, couple has started hinting to the plan of introducing fresh hike on the cargoes. A Saud Arabia producer informed, “Our supply for PE might remain tight until March. At the current supply-demand condition, it is inevitable that prices must move higher.”

Another regional producer are also discussing plan to implement small to moderate hike in import metallocene PE (mPE) cargoes following the latest upswing the in the nearby China market. “And for our side, we plan to only purchase small quantity to meet immediate need. Anyway, demand for our end product is not great,” a regional HDPE bag maker commented.