Asia Daily PP and PE Overview 2 February 2018

CHINA

• Import market continue to surge
• Purchasing sentiment appears to be weaker

Polypropylene (PP)

Traders lifted offers for Saudi Arabia homo-PP yarn and injection to $1290-1300/ton CFR China, LC 90 days term and managed to conclude deals after conceding to $10/ton discount. Despite the fact that deals reported are rather small, such development might motivate more suppliers to implement similar move in the near term.

In domestic market, though purchasing activities disappointed many sellers, it appears converters are still interested in cargoes offered at the lower end of the overall price range. “This would be translated into lower than expected piled-up inventories levels at producers’ side after the long holiday. And we are hoping to see the current trend to persist in the post holiday term” a trader said.

Polyethylene (PE)

Major Thailand maker lifted LLDPE film offers by $20/ton from last week to $1290/ton CFR China, LC AS term and deals have been realised after a small discount. At the meantime, traders are very cautious about large purchases with a source said, “Although these prices are similar to domestic prices at the moment, however it is for March shipment, which is a little too far. It is better to be cautious.”

Market does not seem to have much confidence in LDPE market, citing the fact that traders have replenished large quantity in the previous month. Market would be bloated once these cargoes arrive, sources said.

SOUTHEAST ASIA

• Market is calm with limited trading activities
• Additional drop in ethylene costs create more concern among buyers

Polypropylene (PP)

The regional market remains relatively stable on the final trading day of the week with very limited new offers available. An interesting development in domestic Indonesia is that major suppliers here continue to be active in forward selling PP cargoes for March delivery and discounts started to emerge. Buyers are loosing confidence in then medium term outlook, fearing that the current firming trend might not sustain amid suppliers’ aggressive stance.    

Polyethylene (PE)

The import LLDPE film market in Vietnam has gained some pace, with deals for regular Middle Eastern cargoes concluded in the range $1260-1285/ton CIF, LC AS term. However, trading activities are gradually subsiding as buyers refrain from taking high costs cargoes ahead of the long Lunar New Year holidays. “Price risks are too high. If ethylene costs persist on the softening path in the coming days, it might create a brief opportunity to obtain large discount after the holiday,” a buyer express his expectation while adding slower end product orders.

Overseas suppliers might announce fresh price for March shipment later than usual given the clash with the Lunar New Year holiday, and in contrast with buyer expectation, many are planning to keep new offers on the stable for firmer notes due to maintenance shutdown.