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CHINA

• Local sentiment remains strong after the holiday
• Import market elevated by domestic firmness 

Polypropylene (PP)

Most players have resumed working on Sunday, 8 April 2018, which saw a satisfactory number of deals for both PP and PE. Total inventories at Sinopec and CNPC’s warehouse rose to 900,000 tons on 7 April but quickly reduced to 870,000 tons as of this morning. “We have almost sold out the daily allocation. The sentiment is so active and we expect this trend to sustain throughout the week,” a trader said.

In the import market, except for Indian homo-PP concluded at $1190/ton CFR China, LC 30 days term, most others cargoes are traded above the $1200/ton threshold. “If the domestic market continues to advance in the coming days, overseas suppliers would have better support to introduce additional hike on the new prices. We are optimistic about the near-term outlook,” an international trader offer Saudi homo-PP at $1200-1220/ton CFR China said. 

Polyethylene (PE)

Import HDPE film to China started to see $10-20/ton increased from last week and interestingly, deals have been achieved at the latest price levels. “In the meantime, import HDPE film above the $1400/ton mark is not gaining any attention from buyers. We managed to sell out some Iranian cargoes at $1360/ton CFR China – the level that our customers resisted strongly before the Tomb-sweeping festival,” a trader said.

Buying interest for LDPE film also appears to be better week on week with Qatar cargoes managed to fetch deals at $1210/ton CFR China term. “Except for LLDPE film, sales for LDPE and HDPE are satisfactory. We expect to see healthier demand condition throughout this week,” a supplier commented.

While there are many positive developments taking place mostly on the local ground, players are not forgetting the on-going trade tension between the USA and China. According to China Custom Department, in 2017, the country exported approximate 11.68 million tons of plastic end product under the HS code 3918, ‎3922 to 3926, of which 30.43% were destined to the USA. End product businesses would be affected strongly if the current tension aggravates. 

SOUTHEAST ASIA 

• Import homo-PP back on the firming track 
• Regional PE market struggle with sluggish demand 

Polypropylene (PP)

Import homo-PP to the region is back on the firming track with a major Saudi Arabia maker introduced $10/ton hike of the latest offers to Vietnam, reaching $1250/ton CIF, LC AS term after achieving satisfactory sales result in the previous week. However, buyers are mostly asking for the earlier prices, citing the slow demand condition domestically. “We have to cut local prices VND100,000/ton ($4/ton) to deplete locally Saudi homo-PP at VND32,400,000/ton including VAT ($1292/ton without VAT), FD Vietnam, cash term. The market is very slow and hence, we think it is difficult for import to bear any major rebound,” a trader said.

A couple of Middle Eastern suppliers also agreed with the notion that market has risen above the bottom levels, yet has little support for large increases. “Demand in other major markets including India and Pakistan is cooler to a certain extent,” a producer commented. 

To confirm the development, an Indian trader said, “Demand in India is softer and so prices. We were able to achieve deals for Middle Eastern homo-PP at above the $1300/ton threshold last month, while at the moment buyers are not interested in the $1285-1290/ton levels.” The source added that most bids coming in at $1270/ton CIF India for the same cargoes.    

Polyethylene (PE)

There are very limited new offers for PE to the region on the first trading day of the week though it appears that the improved demand condition in China might need more time to cast any positive spill-over effect to Southeast Asia. Saudi LLDPE film cargoes are still available in the range $1140-1150/ton CIF Vietnam, LC AS term. “There are only 300 tons available and we believed that buyers would purchase given better sentiment in China market,” an international trader said.

Meanwhile, local Indonesia has not seen any improvement in demand, and in spite of competitive offers for both LLDPE and HDPE film in the distribution market, buyers are still very reluctant. “We are watching out for China market, and if demand here continues to improve in the coming day, sentiment across Southeast Asia would pick up eventually,” a market source added.