Asia Daily PP and PE Overview 5 March 2018

CHINA

• Local homo-PP continue to fall in spite of the return of converters
• PE buyers showed strong preference for prompt cargoes

Polypropylene (PP)

Total PP and PE inventories at major local producers’ warehouses rose 95,000 tons from last Friday to approximate 995,000 tons as of 5 March 2018. Domestic offers for homo-PP continue to see CNY50/ton ($8/ton) reduction, marking five consecutive weeks of falling, bringing the average local homo-PP yarn prices to about $50/ton lower than import offers. “Our customers are back, however many are still struggling to restore regular operation rate due to the lack of manpower. At the meantime, we remain optimistic about the near term outlook since on-hand inventories at buyers’ side are low,” a trader commented.

Polyethylene (PE)

Chinese converters are showing greater interest for prompt HDPE film cargoes in recent days and addition to softer local offers, deep-seas materials have lost the competitiveness to a certain extent. A buyer purchased Iranian HDPE film (EX 5) at $1390/ton FCA China, LC AS term said, “We accepted higher price level for the short lead time. Ethylene costs have plunged considerably and while the impact on the PE market remains unclear, we prefer not to engage in long shipments.”

SOUTHEAST ASIA

• Falling upstream costs continue dampening sentiment in PP, PE market
• Local Indonesia PP market rebound, players believed otherwise

Polypropylene (PP)

Major domestic makers in Indonesia lifted homo-PP yarn and injection prices by $25/ton after slashing offers in the previous announcement. The rebound does not excite buyers in the country, who continued suffering from sluggish end product demand and have mostly replenish cargoes in the previous week at much more competitive levels. “The increases might not sustainable amid sloppy buying interest. We think this is not the bottom and prefer to take cautious stance over the near term,” a source said.

Sentiment in Vietnam is strangely quiet, in which very limited respond toward few offers observed on the first trading day of the week. Chinese coal based PP continue to show up in Vietnam in the range $1300-1310/ton CIF Vietnam, LC AS term with a buyer added, “Demand in China and Indonesia is weak while upstream propylene costs are falling. This is a strong indication for a possible weakening trend in PP market. We are not planning any replenishment at the moment.”    

Polyethylene (PE)

There are very limited numbers of new offers observed in the regional market and continued softening ethylene costs once again whirl the market confident. “We managed to sell some quantity of Middle Eastern HDPE film at $1420/ton CIF Vietnam in the previous week, a $30/ton reduction from initial price list. Buyers are very reluctant and we are still considering new offers for this week,” an international trader said.

Other Middle Eastern producers, who announced March shipment offers in the previous week, have yet to decide on the final prices. Buyers are cautiously awaiting the decision, yet many have expressed the intention to either skip purchases or only take smaller than usual quantity.