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CHINA

• Local market remains active with spot homo-PP reached new high for the year 
• Limited local supply stimulated strong demand for nearby PP, PE cargoes 

Polypropylene (PP)

Domestic spot homo-PP in China hit the highest level since the final week of January 2018 as limited supply stemming from a series of planned and unplanned shutdown amid healthy pre-holiday demand steer market higher. On an average, spot homo-PP yarn traded in the local market at CNY10,275/ton EXW China, cash equivalent.

Buyers turn to import market this week, which explained to strong sales results for nearby shipments. A regional trader claimed to have sold approximate 13,000 tons of Vietnamese homo-PP yarn to China this week, while Philippines cargoes sold around 4,000 tons. “We expect no less than 15,000 tons cargoes from South Korea, too. All of these parcels would arrive before or during the National Day holiday and therefore, we are a little concern on the post-holiday demand outlook,” a trader said. 

Polyethylene (PE)

Overseas sellers continue holding firm on import LLDPE film cargoes to China and except for the Indian LLDPE film Mi-1 grade emerged at $1090/ton, most other origins are above the $1100/ton threshold. “Sales are not extremely strong, but steady for November to December arrival. Market will be off on Monday for the Mid-Autumn Festival and we might more new offers by mid of next week,” a source said. 

SOUTHEAST ASIA 

• October shipment offers emerged at lower levels 
• Sentiment remains bearish across the region 

Polypropylene (PP)

Despite the initial acceptance observed in Vietnam and Indonesia markets for Saudi homo-PP cargoes, suppliers are still facing difficulties in depleting allocations, from which two separate distributors for this cargo decided to divert the remaining quantity to other markets. 

“Instead of agreeing to additional discounts, we sent the cargoes to China where demand is much better at the moment,” one of the international traders informed.

Polyethylene (PE)

A Saudi Arabia producer conceded to $20-40/ton discount on PE cargoes to Southeast Asia market, offering at $1140-1150/ton for LLDPE film and $1300/ton for HDPE film, all based on CIF, LC AS. The producer later offers another $20/ton cut on HDPE film to Vietnam, at $1280/ton given the extra sluggish condition in the market.

Regional buyers are rather concerned over the near to medium term prospect for HDPE market citing the gradual improve supply condition. There is an offer from a trader for 1000 tons of Thailand HDPE film at $1275/ton CIF Vietnam and bids were heard at $1265/ton. Such competitive prices are catching market attention while putting pressure on other origins.