Asia Daily PP and PE Overview 30 January 2018

CHINA

• Domestic inventories fall in quicker pace
• Stable to firmer outlook is expected

Polypropylene (PP)

Total PP and PE inventories at major domestic producers’ warehouses fell 60,000 tons to reach 580,000 tons as of 30 January 2018 on continued purchasing activities. Such buying power might rage throughout this week, sources said, however might gradually diminish in week ahead given the absence of logistic companies.

There have not been any major swing in import ground with main stream cargoes from Saudi and India remain in the range $1240-1260/ton CFR China, LC 0-90 days term. “No discounts were given despite hard negotiation. We might need to make some purchases to leverage on the recent strengthening Chinese Yuan. Import arrival after Lunar New Year might be very limited,” a trader said.     

Polyethylene (PE)

There are several offers for USA origin cargoes including both prime and non-prime grades, however, players are not putting heavy concern over this matter citing the limited quantity available. Prime grade USA cargoes currently stand at $1200/ton for LLDPE film, $1320-1330/ton for HDPE film, $1300-1350/ton for HDPE blow moulding, $1200-1220/ton for HDPE injection, and at $$1220-1230/ton for LDPE film, all based on CFR China LC 90 days term.

Chinese players are generally expecting that market has hit the cyclical peak and might remain firm throughout the Lunar New Year holiday. With heavy maintenance shutdown schedule at Middle East and Southeast Asia PE plant during quarter 1, import arrival to China might drop in the coming months.    

SOUTHEAST ASIA

• Resistance started building up across the region
• Weak demand for import homo-PP persist in Indonesia

Polypropylene (PP)

While overseas suppliers continue lifting import homo-PP offers to Vietnam, pushing dutiable cargoes from Saudi Arabia to the $1300/ton threshold on the second trading day of the week; market does not seem very happening in Indonesia. In fact, offers for Philippines homo-PP yarn cargoes witness stable to $15/ton softer from last week to $1300-1325/ton CIF Indonesia. “Our principal supplier allocated smaller than usual quantity to Indonesia this month given the slack demand condition here compared to other market within the region,” an international trader offer Saudi cargoes at $1280/ton CIF Indonesia, said. The source added that buyers are more in favour of local cargoes for now.

Coming back to Vietnam, Saudi Arabia material emerged at $1300/ton CIF, LC AS term - the highest level in several years. No immediate deals have been reported, yet it appears that buyers here are widely expecting this development. “We might only announce new offers towards the end of the week, however we are looking at the same level given the lack of cargoes and surging upstream costs,” an international trader selling Saudi homo-PP commented.    

Polyethylene (PE)

After implementing fresh hike on import PE cargoes to Vietnam, suppliers started facing difficulties in attracting deals for LLDPE film cargoes in particular, while HDPE are still enjoying healthy demand. An international trader offered Kuwait LLDPE film at $1280/ton CIF Vietnam, LC AS term informed, “There are no bids from regular customers. Many are still looking for cargoes below the $1250/ton threshold citing the recent plunge in ethylene costs. We prefer to wait and see instead of adjusting price at the moment.”

At the meantime, a Thailand producer announce new HDPE film offers to Indonesia with $50/ton increased week on week to $1550/ton CIF Indonesia, LC AS term. Buyers are planning to negotiate for some discounts to purchase some quantity considering that local market is matching towards the $1700/ton mark.