Asia Daily PP and PE Overview 30 May 2017

There are no trading activities in China as players are off for the Dragon Boat Festival. Market shall resume by Wednesday, 31 May 2017.

In Southeast Asia, the import market remains relatively active compared to regional domestic ground. Buyers in Vietnam are concluding deals for PE cargoes after major overseas suppliers agreed to additional discount from initial prices last week. A distributor reported to have sold nearly 2500 tons of Saudi Arabia PE at $1110/ton for HDPE film and $1120/ton for LLDPE film, CIF Vietnam, LC AS term said, “We are requesting for addition quantity as couple of our regular buyers are still having some small purchase inquiries. Demand is not very strong but buyers have generally accepted the current prices.”

It appears that Vietnamese buyers, especially local traders are putting more favor on deep-seas cargoes, which to be arrived in August. A market source explained, “Domestic ground is not very strong at the moment, however, we hope to see better condition by third quarter of the year, when these cargoes arrived. Prompt materials at the moment are not very attractive.” The source placed bid for Middle Eastern HDPE film at $1090/ton CIF Vietnam, LC AS term.

Meanwhile, a Thailand producer also offered additional $10/ton discount on HDPE cargoes to Vietnam this week at $1125/ton for HDPE film and $1135/ton for HDPE blow molding, CIF, LC AS term. A source close to the producer informed, “We have completely sold out the available quantity to only selective customers. At the moment, we prefer to monitor further development after Chinese buyers resume working before announce new prices.”

Indonesian buyers also show higher level of acceptance toward import homo-PP from various origins. Several deals for Korean homo-PP are reported at $1060/ton CIF Indonesia, LC AS term, with 5% import duties. A buyer said, “Our supplier agreed to $30/ton discount from initial price list and we decided to purchase a small quantity. The cargoes would arrive after the Ramadan celebration.”

June would be a short trading month for both Indonesia and Malaysia market as a large number of manufacturers would allow employees to leave work from 20 June till 3 July for Ramadan celebration. While post holiday outlook remains uncertain at the moment, Indonesian buyers are expecting further reduction for PP film prices, “Supply for PP film is too high in local ground and we think prices might face tough time firming up despite strong upstream costs. We think local suppliers might need to keep offers low even in July,” a buyer expressed his opinion.