Asia Daily PP PE Report 24 Mar 2016

In China, sentiment on Dalian Commodity Exchange was mixed as futures contract number 1605 for PP settled at CNY35/t ($5/t) higher to reach CNY7237/t ($950/t without VAT). In contrast, LLDPE contract for May delivery slashed CNY45/t ($7/t) to settle lower at CNY9245/t ($1214/t without VAT).

Domestic spot PP, PE market ended the volatile trading day at the levels unchanged from the previous session, and local sellers are holding very firm stance on their cargoes as futures trading posted just a mild reduction. A trader in Linyi said, “Futures market has been fluctuating recently, yet domestic offers are largely stable which proved that basic demand is still exist. We think the market would continue to have some support from scheduled turnaround in the near term.”

In the import market, homo-PP cargoes from dutiable origins are mostly above $1000/t threshold now with some deals concluded observed at $1010/t CFR China, LC 90 days term. A market source based in Ningbo informed, “Sellers are regulating their offering quantity and only open price for a very short validity. Our Indian supplier informed that they might need to delay March shipment cargoes to next month due to tight supply.”

The import PE market appears to be less encouraging and most players contacted by CommoPlast were complaining about difficulties in concluding deals. A trader in Guangdong reported, “Most of our customers are still operating at 60% capacity due to lack of end product orders, which explains to why buyers are not interested in high price cargoes these days. We think that the extent of further price hike would be small as buyers are not accepting the current levels.” Market players are talking about the prospect of Korean and Japanese trading houses to bring more Iranian cargoes to China in the near term.     

In Southeast Asia, the market sentiment sees little changes and the general firming trend is still dominating the whole outlook. Players received additional new PE offers from international supplier with $100-110/t hike compared to last month to reach $1220-1230/t for HDPE film and $1250/t for LLDPE film, all on CIF SEA, LC AS term. Source from the producer informed, “Our LLDPE line recently encountered some minor technical issue and might remain offline for at least a week, therefore, we are not having much cargoes for this grade. Demand for LLDPE film across the region is relatively healthy, however, we are a bit concern about the outlook for HDPE.” It is interesting to witness an increasing number of re-export PE cargoes from China to Vietnam this week as sellers are seeking to optimise profit margins amid slower demand in local ground. A trader in Shanghai expressed his interest in diverting cargoes to S. Asia market said, “We have cargoes available and willing to talk to SEA players if there is any interest.” Besides a wide range of re-export offers for HDPE film found in Vietnam, some sellers started to discuss about the opportunity of selling same type of LLDPE film cargoes at $1250-1255/t CIF, LC AS term. Buyers is on the other side showing certain degree of caution regarding the state of demand in the near by China market.

Players in S. Asia PP market is now very concern about the supply condition within the region in the coming month after a Malaysian producer informed about some mechanical difficulties they are facing at their PP plant. Source close to the producer said, “The homo-PP line has been repeatedly shut at least three times since last week. We are working to resolve the issue and at the meantime we are still making PP copolymer grades. Our supply might only come back to normal in May.” Some converters in Indonesia apparently started to replenish cargoes for June production by now as a series of plants issues within the region worried the market. Meanwhile, another regional marker has announced new homo-PP prices for April shipment at $1070-1080/t CIF SEA, LC AS term. A distributor commented, “We think the producer’s offers are very competitive at the current market condition and we do not think our principal is interested in negotiating as they need to prepare stock before the major maintenance shutdown this July. We think the market is still on the firming momentum.”

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.