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CHINA

• Buying interest in local market improved visibly
• Import LDPE film to China might have reached the cyclical bottom

Polypropylene (PP)

Total PP and PE inventories at major domestic producers’ warehouses fell 45,000 tons day on day to approximate 920,000 tons as of 27 March 2018, highlighting a visible pick up in demand. However, local suppliers have not introduced any hike on the latest offers, instead, continue to keep discount scheme in place. “The main aim is to deplete more inventories ahead of the long weekend holiday next week. Fortunately, converters are very active in making replenishment due to healthy profit margin,” a trader said.

Import homo-PP below the $1200/ton threshold continue to absence, leaving Saudi Arabia cargoes at $1210/ton CFR China with no discount available. It is uncertain if import homo-PP to China has hit the bottom or simply due to the lack of seller’s interest in competing directly with attractive local materials.   

Polyethylene (PE)

Major Qatari maker slashed import LDPE film to China by additional $20/ton from last week to $1160/ton CFR China, while maintaining LLDPE film prices unchanged at $1150/ton. The cuts on LDPE film literally trigger demand, from which the producer has to withdraw the offer very shortly after the price announcement. A buyer confirmed ten containers of this grade said, “There is no more quantity available though we have extra inquiries. The market is very active today.”

Other PE grades, including metallocene PE, are also moving lower this week due to constant pressure from the local ground. Supply is not as tight as it was before, and therefore, players are not expecting any strong rebound soon.     

SOUTHEAST ASIA

• More producers cut April shipment PP, PE offers
• Buyers expressed intention to make new purchases

Polypropylene (PP)

Transactions remain limited across the region as buyers are watching out for further development in the nearby China market before making decisions. With the latest offers from another major Saudi Arabia producer decreased $50/ton month on month to $1240/ton to Vietnam and $1260/ton to Indonesia, CIF, LC AS term, buyers started to raise discussion about making fresh replenishment.

A Vietnamese buyer said, “We are bidding for $30/ton reduction to purchase in larger quantity. If the producer agrees to our bid, the market has already reduced $100/ton from the peak, which might indicate the bottom is near.”

In Indonesia, local traders have been keeping homo-PP prices at the level $1280-1290/ton FD Indonesia, cash equivalent for four weeks in a row now. It appears that prices have reached the bottom, however, buyers are not convinced. “Demand is not there, hence we do believe that suppliers would give in soon,” a converter said.

Polyethylene (PE)

Import HDPE film to Vietnam remains soft with the current range stands at $1320-1350/ton CIF, LC AS term. Most buyers expressed buy idea at $1300/ton for regular origin and $1280/ton for irregular cargoes. “Domestic market is sliding quick. The HDPE film market is undergoing a correction and we think prices might touch the $1300/ton mark in the coming weeks. Therefore, we prefer to hold cautious stance,” a buyer said.

On the other hand, a number of buyers contacted by CommoPlast have expressed the intention to purchase LLDPE film cargoes if overseas suppliers agree to $1170-1180/ton CIF Vietnam, levels. This is $10-20/ton below the latest offers by a major Saudi Arabia maker. Players are waiting for final price decision from the suppliers.