Asia Daily PP and PE Overview 31 January 2018

SOUTHEAST ASIA

• Continued rising homo-PP prices started facing resistance in Vietnam
• Purchasing sentiment shows signs of slow down

Polypropylene (PP)

More overseas supplier lift import homo-PP prices to Vietnam, pushing offers for dutiable cargoes to above the $1300/ton threshold for the first time in more than two years, data from CommoPlast showed. Surging propylene costs and persistent lack of supply are the main factors driving the constant firming trend, however, it appears that market has just hit the resistance point. A number of medium to large scale converters reported to have comfortable inventories until April, depicting an intense tug-of-war ahead. “We expect deals to conclude with $20-30/ton discount. We are unable to comprehend any further price hike as end product orders are dropping ahead of the long Lunar New Year holiday,” a woven bag maker said.     

Polyethylene (PE)

A major Thailand producer reported to have concluded a small quantity of HDPE yarn to Vietnam at $1420/ton, CIF, LC AS term while Middle Eastern suppliers are complaining about difficulties facing in achieving deals for HDPE film at similar level. “Buying sentiment is slowing down due to the fast approaching holidays. Supply remains tight, yet we are concern about the recent falling ethylene costs and softer buying interest in the nearby China market,” an international trader offer Kuwait HDPE film at $1390-1400/ton CIF Vietnam, said.

In domestic Malaysia, trading activities remains mediocre after a major domestic producer lifted HDPE by MYR50-100/ton ($13-26/ton) from last month, regardless of a more aggressive movement in the regional market at the background. “The increase is much smaller than expected, however, we do expect the current trend to sustain through February,” a source added.