Asia Daily PP and PE Overview 1 February 2018

SOUTHEAST ASIA

• Market resistance getting stronger  
• General sentiment slow down

Polypropylene (PP)

It becomes clearer that import homo-PP offers from dutiable origins above the $1300/ton threshold are facing strong resistance from buyers. Several international suppliers offered Saudi Arabia and Indian cargoes in the range $1300-1310/ton CIF Vietnam, LC AS term are finding themselves in a undesirable position and at least one has withdrawn price list. “We only have 50 tons on hand, however buyers are simply not placing any bids. The holiday is drawing near and we think market has temporarily hit the peak,” an international trader informed.

In local Indonesia market, more suppliers are offering forward selling cargoes for March delivery, which add more concern about the medium term outlook. “Prices are no different from the current offer levels in distribution market, however, it depicts sellers’ lack of confidence in the future prospect, which is very alarming,” a buyer said. Here, import offers for dutiable cargoes at $1280/ton CIF Indonesia are not very attractive to buyers considering the narrow price gap with local materials.

Polyethylene (PE)

There are very limited new offers for PE toward the end of the week as most suppliers claimed to have sold out allocation and might only open new prices in the coming week. While many Vietnamese buyers find it difficult to accept the current HDPE prices amid the inability to transfer costs to end products, a small portion of traders are speculating on the tightening supply condition in the near term, which encourage this section to lift acceptance level to around $1390/ton for deep-seas HDPE film cargoes. Prices above the $1400/ton threshold for far shipment are temporary facing stiff resistance.

In addition, several suppliers for metallocene PE grades claimed to have sold out quantity after implementing up to $70/ton hike from last month. Supply is tight given the recent production disruption at Singapore’s Prime Polymer and Thailand’s PTT.

In an separated news, Indonesia’ PT. Lotte Chemical Titan Nusantara has restarted LLDPE production while the company’s HDPE line is down in preparation to run metallocene grade, sources said.