Asia Daily PP PE Report 17 Mar 2016

In China, futures prices on Dalian Commodity Exchange posted another day of drastic gain with PP futures added CNY277/t ($43/t) to reach CNY7233/t ($954/t without VAT) and LL increased CNY345/t ($53/t) to settle at CNY9310/t ($1227/t without VAT).

Firming futures trade and a number of unplanned shutdowns in local market has encouraged sellers to lift domestic spot offer by CNY200/t ($31/t) for PP cargoes and CNY100-200/t ($15-31/t) for PE cargoes today. Despite some discounts are still available in the distribution market, many sellers have elected to suspend all offering with hope seeing higher price in the next trading day. A trader in Zhejiang said, “Demand in local market is better than at beginning of the week and we managed to conclude a good number of deals. We are limiting sales with hope to achieve better margins in the coming days.”

In the import market, a major Indian maker announced new homo-PP offers to China with $125/t hike compared to last month to reach $950/t CFR China, LC 30 days term. A buyer in Ningbo received the new offer said, “Our supplier is having very limited allocation for this month, however, buyers are showing resistant towards such high price level. We think that demand might not improve so much in the near term, yet prices might continue to move up given supply tightness.”

In the production status, on a time span of one week from 8 to 15 March, at least five major PP and PE producers in China experienced technical issues, forcing them to take emergency shutdown at their plant. Today, three out of five makers have resumed production while PetroChina Dushanzi Petrochemical Corporation is expected to restart its 690,000 tpa PP plant and 720,000 tpa PE plant by 22 March. Fujian Refining & Petrochemical Company Limited (FREP) is striving for a restart on 23 March. Kindly refer to Plant Status section on www.commoplast.com for detailed information on these shutdowns.

In Southeast Asia, the PP market continue to firm up with a major Saudi Arabia maker implemented additional $30-40/t on their homo-PP cargoes just a day after the producer introduced $100/t hike on the same cargoes, lifting prices to $1020/t CIF Vietnam, LC AS term. A major Indian producer has also announced new prices for homo-PP to Vietnam at $1030-1040/t CIF, some $140-150/t hike compared to last month. A distributor commented, “We sold Indian homo-PP cargoes at $1030/t CIF Vietnam to our converter customers. We only have 300 tons of material this time, therefore we did not agree to any discount. We think that this firming trend might sustain till next month.” Meanwhile, a regional producer is reportedly having minor technical issues at their plant which caused a reduced in PP supply this month.

The PE market is waiting for international producers to announce fresh offers for April shipment with most players expect drastic increases based on the upstream costs and supply tightness. A Malaysian trader commented, “Our customers are willing to accept higher prices to purchased on hand-to-mouth basis as they are holding low inventories levels. We expect the current firming trend to last till end of April, however, May outlook remain cloudy to us.” Meanwhile, an international trader added, “We see ethylene monomers and PE are traded at the same level again, and this sounds very risky to us, especially when downstream demand is not as strong as expected. We mainly focus on doing back-to-back business and keeping minimal inventory to avoid risk. We are waiting for producers to open new offers before taking our position.”

For detail Daily Prices in China and Southeast Asia market, kindly visit our website at www.commoplast.com. Please contact our representatives at commoplastinfo@gmail.com for log in assistance.