Asia Daily PP and PE Overview 08 Sept 2016

In China, LLDPE futures prices on Dalian Commodity Exchange continue to advance, adding another CNY175/ton ($26/ton) from yesterday to settle at CNY9005/ton ($1154/ton without VAT). PP futures however, lag behind a little by shredding just CNY10/ton ($1/ton) to close at CNY7289/ton ($934/ton without VAT.)

Domestic market also completed the trading day on mixed trend, following closely the futures trades. PP spot prices lose CNY50-100/ton ($8-15/ton) while PE cargoes increased CNY50/ton ($8/ton). Players reported seeing healthy demand for LLDPE and LDPE film though most deals are concluded with discounts.

A trader said, “Sales for PP and HDPE are rather disappointed and many of our customers are trying to postpone their purchases.” Meanwhile, a PP yarn converter in Fujian reported, “Local prices soften a little bit today and we plan to replenish a small quantity if prices breach below the CNY8000/ton ($ $1025/ton without VAT) threshold. Demand for our end product is regular at the moment.”

Suppliers in the import market are complaining about difficulties they face in attracting buyer’s attention on homo-PP cargoes. Meanwhile, weak demand for HDPE film has encouraged suppliers to cut their offers to speed up sales process. A Southeast Asian producer sold HDPE film cargoes at $1120/ton CFR China, LC AS term informed, “These are remaining parcels as our customers refused to take additional quantity previously. Even at reduced offer levels, buyers are not very keen to keep some extra stock. We are really concern about the near term outlook for HDPE film market.”  

In Southeast Asia, market is calmer towards the end of the week with no other new offers reported within the region. International suppliers announced offers earlier this week have mostly concluded their allocation with slight discount from the initial prices. A trader received Saudi Arabia homo-PP at $1000/ton CIF Indonesia, LC AS term informed, “Our supplier has offered discount on deals; however we decided not to proceed further as we still have sufficient stock on hand. Demand in local market is rather slow at the moment. We hope the condition would improve after the holidays next week.”

In Vietnam, it appears that buyers are not aggressively scouting for cargoes as PP supply improve notably in the country. A market source explains, “We have purchased a large quantity in the previous month, hence we prefer to deplete our stock first. Besides, we still have time to source for cargoes before the implementation of new custom duties rate. And the fact is that local market has yet to see any improvement recently is having us a little nervous.”

The regional PE market remains mostly stable from the previous trading session amid lethargic buying interest. It is expected that regional trading activities might weaken further in the coming week as major suppliers and buyers are off for holidays. A Saudi Arabia producer said, “We will be off from 12 September. We have sold out our available material and might not open new offers until we resume business on 19 September.”

There has not been much movement observed in Indonesia and Malaysia market toward the end of the week with buyers in these countries seems holding back their purchases on weak end product demand. A shopping bag manufacturer in Malaysia commented, “We are still having sufficient material while end product business is rather stagnant. We might wait until after the holidays before deciding on fresh purchases.”

In related plant status news, Singapore’s TPC reportedly shut its 260,000 tons/year LDPE/EVA swing line today for a brief maintenance. The unit might remain offline till mid of next week. Market sources informed shipments from the suppliers have been delayed.           

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