Asia Daily PP and PE Overview 18 October 2017

In China, futures market retain the firm position as the country’s 19th Communist Party Congress kickstart. PP contract added CNY20/ton ($3/ton) to reach CNY9105/ton ($1176/ton without VAT) while LLDPE contract reached CNY9860/ton ($1273/ton without VAT), a CNY70/ton ($11/ton) higher day on day.

Trading activities in domestic spot market remains relatively stabe with spot offers for both PP and PE firmed up another CNY50-100/ton ($8-15/ton) thank to healthy futures trades. “Just that converters are very conservative about fresh buy. We continue to wait and see because market has the support to remain firm in the near term,” a market source informed.

In the import market, overseas sellers continue to lift import HDPE film to the country as supply shortage keep demand for this grade strong. Thailand HDPE film concluded at $1290/ton CFR China, LC AS term – a $20/ton hike from last week. A trader said, “We only managed to secure 108 tons of HDPE film from the principal supplier while most others are unble to obtain any quantity. The current market condition might persist in the near term. On the other hand, LDPE film is not performing so well as supply is more comfortable.” In fact, Thailand LDPE film is now traded at $1270/ton CFR China – lower than HDPE film, which is not an usual condition.

There is a deal for 5000 tons of Iranian HDPE film for December shipment today. An Iranian supplier added, “Supply tightness for HDPE film might spread into November. Most Iranian producers in cluding Arya Sasol, Mehr, AKPC and Ilam are still operating at about 50% capacity due to lack of feedstock. These plant might keep run rate low throughout the coming weeks.”

After deals for Indian homo-PP concluded at $1090/ton CFR China, LC 90 days term in the previous session, no other cargoes are offered at below the $1100/ton threshold. Major Saudi Arabia producer intent to keep homo-PP yarn offers at $1160/ton, and buyers are just not very receptive. “Market might be stable to firm throughout the Communist Party Congress week. We must monitor the development in the coming week when market resumes the normal order,” a source added.      

In Southeast Asia, sentiment is lightened up in domestic Vietnam market as traders here managed to conclude a good number of deals for re-export HDPE film cargoes to China. Many are still attempting to seize the opportunity and actively collecting cargoes in local ground.

A Vietnamese trader informed, “Market is very happening and many Chinese buyers are searching for HDPE film cargoes to ensure safe inventories levels. We managed to conclude some deals for Middle Eastern cargoes at $1270/ton CFR China term, and we hope market would remains in this condition in the near term,”

At the meantime, import LLDPE film seems to be soft. Couple of special deals for Thailand LLDPE film are reported at $1150-1160/ton CIF Vietnam, LC AS term. These are compensation prices for seriously delayed cargoes, which might not reflect the actual market situation. However, Middle Eastern producers are also collecting bids for LLDPE film at $1170-1180/ton levels, about $20-30/ton lower than initial offers and if deals materialize.

In the regional PP market, import Saudi Arabia homo-PP to Vietnam softened slightly week on week with several deals emerged at $1155-1160/ton CIF Vietnam, LC AS term. Meanwhile, many Vietnamese buyers are waiting for prices below the $1150/ton threshold, hence only make small replenishment. “There is high chance that import prices might soften further in the near term, hence we prefer to just wait and see. We plan to restock only by end of this month or beginning of November,” a converter said.

Similar situation is observed in Indonesia. “We are placing bids for Vietnamese homo-PP at $1190/ton. We have no plan to accept higher levels as our end product prices are low. We are waiting for the supplier feedback,” a converter received offers for Vietnamese homo-PP at $1210/ton CIF Indonesia commented.