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CHINA

• Destocking activities remain slow
• Import PP, PE moved lower under pressure of constant falling local prices

Polypropylene (PP)

Total PP and PE inventories at major domestic producers’ warehoused reduced only 15,000 tons from the previous days to approximate 990,000 tons as of 13 March 2018. The overall purchasing activities are rather light and traders continue providing CNY50-100/ton ($8-16/ton) discount to attract buying interest. Spot homo-PP in Eastern China stands at CNY‎‎‎8750-8900/ton ($‎‎1181-1202/ton without VAT), EXW China, cash equivalent.

“We started to delivery cargoes sold before the Lunar New Year and plan to make some replenishments really soon. Room for further reduction is getting thinner, though we are not expecting any major rebound in the coming days given the comfortable inventories in local ground,” a trader said.

Import offers for Indian and Russian homo-PP down $20-30/ton week on week to $1220-1230/ton CFR China, LC 0-60 days term on tremendous pressure from local cargoes. “While overseas sellers are not eager to cut prices due to low sales pressure, spot buyers are switching to local materials for more costs saving. This situation is expected to persist until correction takes place,” another market source added.

Polyethylene (PE)

Import PE offers from major Thailand and Qatar producers witness $10-20/ton drop from last week. The adjustments do not seem to have enticed any interest from buyers, who are now mostly on the wait and see position, claiming to have better negotiation power in the local market.

“We fear that the downtrend just only started though upstream ethylene costs are regaining strength. Destocking activities are rather slow, firstly due to many converters are still struggling to restore regular run rate while logistics remain a challenge,” a trader commented.   

SOUTHEAST ASIA

• Sentiment remains sluggish
• Saudi major cuts LLDPE film and PP block for the third times to Vietnam
• Local traders adopted a softer stance on PP cargoes in Indonesia

Polypropylene (PP)

Regional buyers are not responding strongly to the softer offers overseas makers announced in an effort to spur buying interest. Middle Eastern homo-PP touches the $1270/ton level again this week in Indonesia with a buyer said, “We obtained similar levels from local distribution market for a free-delivery term. With China needing more time to digest the piling inventories, pressure on import market across the Asia region is real.”

A Saudi maker once again stepped back on PP block copolymer prices to Vietnam, accumulating a total reduction of $70/ton since announcing March shipment offers on the first day of the month. “And yet, we are unable to achieve satisfactory sales results,” an international trader said.  

Polyethylene (PE)

The regional LLDPE film market is spiralling down with Saudi cargoes fell to $1220-1230/ton CIF Vietnam, LC AS term in the third price cuts reported within two weeks. “Buyers are too concern to make fresh purchases at the moment despite the strengthening upstream ethylene market. Other suppliers might soon race to match the move, which would eventually weight on the remaining of March. We remain conservative for now,” a distributor commented.