Asia Daily PP and PE Overview 12 July 2017

In China, LLDPE futures extended the firming trend, adding three digits in value at CNY130/ton ($19/ton) to close at CNY9075/ton ($1142/ton without VAT). In contrast, PP futures inched CNY18/ton ($3/ton) lower to reach CNY8055/ton ($1014/ton without VAT).

Domestic PP and PE prices continue to firm up by CNY50-100/ton ($7-14/ton) for both PP and PE and traders reported receiving increasing number of price inquiries from buyers in Eastern China. “Our customers in the BOPP and PP woven sector have not been this active over the past month due to slow end product business. We expect buyers to return for replenishment in the near term if futures market remain firm.”

In the import ground, a major trader is negotiating to purchase large quantity of Iranian HDPE and LLDPE film at $950/ton CFR China for early September arrival, hoping that year-end preparation would allow demand to pick up at that time. “We are still waiting for the supplier feedback. The reason we placed such low bid was due to the concern over the possible influx of Indian and USA material towards fourth quarter.” An Iranian supplier added that certain banks in China still allow buyers to open LC, and that buyers are more worry about the arrival of low price cargoes purchased previously.

There is still a small quantity of Russian homo-PP available in the market at the level $970/ton CFR China term; yet limited transactions are observed. Players are not expecting any significant price fluctuation within this month, and that market is now heading for stabilizing trend.

In Southeast Asia, demand for import homo-PP improved visibly in Indonesia and Vietnam and it appears that buyers in these markets have accepted the hike implemented by overseas seller. Major Thailand producer introduced another $10/ton increased on import homo-PP yarn to Vietnam from last week, reaching $1085/ton CIF Vietnam LC AS term. A source close to the producer informed, “We managed to sell out 1200 tons with only $10/ton discount and more inquiries are coming in. Customers have accepted our prices and we think this could be a good sign for a stabilizing market.” Meanwhile, couples of Middle Eastern suppliers have also opened offers to Vietnam in the range $1070-1080/ton CIF, LC AS term.

Meanwhile, several Southeast Asian producers have also managed to conclude deals for import homo-PP to Indonesia with $10-20/ton increased week on week basis. An international trader sold 200 tons of Philippines homo-PP at $1110-1120/ton CIF Indonesia, LC AS term said, “Most buyers are still negotiating for lower levels. Market is regaining some strength and we hope this condition would persist in the near term.”

In related production news, Saudi’s PetroRabigh has taken one of its PP line off-stream after encountering mechanical issues as reported earlier this week. The 350,000 tons/year unit produce mainly PP block copolymer grade while the second unit remain unaffected.

The regional PE market is still searching for direction though very few suppliers announced new offers today. There is an interesting development in local Indonesia market that one of major domestic producers slashed PE prices drastically from initial price list, bringing HDPE and LLDPE film to the range $1100-1115/ton FD Indonesia, excluding VAT, cash term. This is lower than most import offers for non-dutiable origin at the moment. A converter said, “We plan to take larger than usual quantity since prices are very competitive. Demand for our end product is not very strong, yet we do expect to see better condition in the coming month.”

A Malaysian converter in flexible packaging sector added, “Our export orders are still regular and at the current raw material prices, we are earning healthy margins. PE market has yet to draw out any significant development that could determine the near term trend, hence we only source hand to mouth.”