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CHINA

• Local inventories pile up on cooling local sentiment 
• Import homo-PP rose with limited transaction reported

Polypropylene (PP)

Total PP and PE inventories at major domestic producers’ warehouses suffer from the weekday increases for the first time in five weeks as purchasing activities cool off after two straight weeks of active buying. The two final trading days of the week see an accumulated reduction of CNY100-200/ton ($16-32/ton) in spot homo-PP prices and a surge in inventories at Sinopec and CNPC by 10,000 tons day on day to approximate 790,000 tons as of 13 April 2018. 

“There is high chance that local prices would continue to fall in the coming week given that many of our customers have already replenished comfortable inventories over the past two weeks. Having said so, we do not expect any large reduction as supply might tighten in the near term amid heavy maintenance shutdown season,” a trader in Shanghai commented.

In contrast, a major Saudi Arabia producer lifted import homo-PP prices by $30-40/ton from last week to $1240-1250/ton CFR China, LC AS term. “We manage to conclude a small deal. Yet, we are uncertain if this trend could sustain in the near term,” a distributor added.

Polyethylene (PE)

Import PE market remains very much unchanged from the previous trading day, however, with aggressive replenishment activities over the past week, especially for LLDPE film, sources are foreseeing a rather comfortable supply month in May and June, as these cargoes arrive. “Meanwhile, we expect HDPE market to hold strong, especially for pipe grade, given that the government continues to accelerate the construction of gas distribution network in Northern China before the winter. Demand is strong,” a local producer commented. 

SOUTHEAST ASIA 

• Limited offers on the final trading day of the week
• Local Indonesia PE market sees improved purchasing interest

Polypropylene (PP)

There are very limited new offers for import homo-PP to the region on the final trading day of the week. While demand in Indonesia remains depressing, major suppliers to Vietnam mostly claimed sold out available allocation. An international trader said, “We are diverting some Saudi homo-PP cargoes to Vietnam due to better demand in this market. The sentiment is improving with the support from the costs side; however, we do not expect any absurd price surge in the near term.”

After tremendous effort over the past two sessions, traders in Vietnam managed to lift local homo-PP prices by VND300,000/ton ($13/ton) to VND32,400,000-33,000,000/ton with VAT ($1292-1316/ton without VAT), FD Vietnam, cash equivalent. “In the meantime, demand also drops. Buyers are not accepting new prices and there is comfortable supply in local ground, which might make it hard to sustain the current trend,” a local trader said. 

Polyethylene (PE)

In a surprising turn, Indonesian buyers become more active towards the end of the week in replenishing HDPE and LLDPE film cargoes, mostly from local ground. Traders reportedly sold cargoes at producer’s price list, which has not happened in weeks, thanks to a combination of stronger upstream costs and firmer offers to China.

“We lifted HDPE film offers by IDR400,000/ton ($29/ton) compared to earlier this week. Converters are returning to restock cargoes due to low inventories on hand. Meanwhile, we maintain offers for LLDPE film and sales result is better,” a trader said. Indonesian players also raise concern about the tightening HDPE film supply ahead as one of the major local producers has switched to produce HDPE pipe grade to meet growing demand domestically and regionally.