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CHINA

• Buyers go fish for discounts in the import market
• Plunging futures trading dampens sentiment in the local spot market 

Polypropylene (PP)

Deals for Vietnamese homo-PP were reportedly done late last week at $1230/ton CFR China, LC AS term. Compared to the peak during the second week of October 2018, prices for this origin has fallen approximately $110/ton. However, a good number of transactions have been seen at the latest price level.

In the domestic spot market, it is interesting that the price gap between January delivery contract for PP on Dalian Commodity Exchange and spot market is now at record high this year of CNY773-923/ton ($111-133/ton), and yet arbitrage traders remains very quiet in channeling cargoes from one platform to the other. 

Polyethylene (PE)

Traders forward selling Indian LLDPE film at $1010/ton and Saudi HDPE film at $1180/ton CFR China on the first trading day of the week. Chinese buyers do not seem to carry the expectation for a stabilizing PE market in spite of the recent strengthening in the upstream ethylene costs.

“Overseas sellers are in the process of clearing warehouses before the year-end season. We become more selective when it comes to new purchases now,” a buyer said.

SOUTHEAST ASIA 

• Firmer ethylene market lends little support to PE sector 
• Regional PP market continues facing downward pressure

Polypropylene (PP)

There are very limited new offers for import homo-PP available on the first trading day of the week, however, regional buyers are very much awaiting price level $1200/ton for Saudi Arabia yarn cargoes. “We have concluded Middle Eastern homo-PP injection at $1200/ton at the end of last week, therefore, we believe that yarn is soon to follow,” a household product converter in Vietnam informed.

In the meantime, there has been report on deals for Vietnam homo-PP yarn at $1230/ton to Indonesia, down $20/ton from initial price list and $30/ton from last week. The regional market is racing lower no thanks to the falling upstream costs and the persistently weak sentiment. 

Polyethylene (PE)

Ethylene costs gain $20/ton last Friday, and yet the impact on the downstream PE market is rather minimal. Suppliers are still racing to slash prices in an attempt to deplete cargoes before the year-end season. “Buyers are just too conservative when it comes to HDPE film. The market is very bearish here,” an international trader commented. 

In local Indonesian, the market is red bath. Latest offers for HDPE and LLDPE film based on FD Indonesia, cash term plunge $20-40/ton week on week, which is attributed to the demand and currency issues. “The LLDPE film availability is rather ample in the local ground. Many deep-sea cargoes including those originated from Indian and USA have arrived and hamper domestic ground. Buyers are having a wide variety of selection now,” a trader commented.