Asia Daily PP PE Report 26 Feb 2016

In China, there is some mixed sentiment in futures trade today with contract number 1605 for PP on Dalian Commodity Exchange posted a small gain of CNY47/t ($7/t) to CNY6538/t ($856/t without VAT). LLDPE futures in contrast, fell CNY105/t ($16/t) to CNY8795/t ($1151/t without VAT).  

Local spot offers for PE remain mostly unchanged from yesterday, and traders attempted some CNY50-100/t ($8-16/t) hike on PP cargoes, however, the effort was hindered by sluggish demand condition. A trader in Shanghai added, “We see a number of traders are trying to split their activities by involving in both spot and futures market these days. We think that market would mostly follow the stable trend in the near term and high inventory level will put a cap on any price hike attempt.” Besides, players reported comfortable stock level for Iranian and Russian HDPE cargoes in local market. Yet, sellers are holding back on their inventory with hope to meet better demand in the coming month.

Import homo-PP cargoes appear to be not so catchy to buyers and a trader from Guangzhou complained, “It is very difficult to close deals recently even for specialty grades. We think that PP prices might not have any significant upsurge in the near term given the absence of buyers.”

In Southeast Asia, Vietnamese players reported a sudden uptick in local demand with PE offers increase VND300,000-400,000/t ($13-18/t) compared to yesterday. A trader commented, “Local market has started to feel the effect from firming international prices. Today, we managed to sell a good number of LLDPE film cargoes to local converters at higher price.” Meanwhile, a majority of overseas suppliers have already announced new prices for their cargoes and negotiation is on going at the moment. A trader expressed his view, “The production issue at ExxonMobil plant may tighten the supply condition in Southeast Asia further but we believed that price might maintain on the stable trend as mediocre demand is not supporting any significant hike”

The PP market also sustains the stable trend, however buyers are quite hesitating with offers above $900/t level for dutiable cargoes. A Vietnamese trader received Middle East homo-PP at $910/t CIF term said, “We have purchased 200 tons of PP last week and we might hold our purchases in the coming days.” A converter in Malaysia added, “The local supplier might announce new prices next week with increases following a good hike in import market. We will have to make a small purchase for our production. Demand for our end product is regular at the moment.”

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