Asia Daily PP and PE Overview 1 March 2018

CHINA

• Satisfactory deals observed in local market
• Discounts reported in the import ground for PE

Polypropylene (PP)

Local suppliers reported to have achieved satisfactory sales on the first trading day of the month, however, most cargoes takers are arbitrage traders, who see the support from firm futures trading. Many converters would only return to their desks after the Chap Goh Mei festival and as a result, traders are very positive about the near term outlook.

At the meantime, demand for import cargoes is relatively weak considering the premium it holds over local material. “We have 300 tons of Philippines homo-PP offered at $1310/ton CFR China, LC AS term. Our customers are not very interested despite the competitiveness. Such sentiment has been in place for a week and looks like market has reached the peak,” an international trader commented.

Polyethylene (PE)

Converters in the agricultural sector continue to place orders for LLDPE film though the quantity is smaller than the past several sessions. On the other side of the supply chain, traders are complaining about running out of warehouse spaces as many cargoes pre-sold before the Lunar New Year have yet to be shipped out as buyers are not fully back. “Stock shall be digested soon, we hope. It is difficult for us to take in additional cargoes at the current condition,” a trader said.

In the import market, deals for Thailand LLDPE film are seen at $1275-1280/ton CFR China, LC AS term – a $5-10/ton softer than initial price list. Meanwhile, import HDPE film above the $1400/ton mark persists in the resistant zone and suppliers started offering discount to attract buying interest. “We are willing to reduce $20/ton for serious buyers,” a trader offer Saudi Arabia HDPE film at $1400/ton CFR China said. The source added that supply remain tight, yet demand is very sluggish.

SOUTHEAST ASIA

• Buying interest continue to deteriorate
• Local Indonesian producer cuts homo-PP prices for the first time in three months

Polypropylene (PP)

A major Indonesian producer cuts local homo-PP prices for the first time in three month on the back of persistent weak buying interest in the country. The cuts of IDR460,000/ton ($33/ton) send price list to approximate $1330/ton without VAT, FD Indonesia, cash term – which is more competitive than many import offers. While deals remain thin, overseas sellers are slowly diverting attention to other markets, where buying interest is better.

In India, import offers for Middle Eastern homo-PP currently reach $1360-1380/ton CIF India, LC AS term, “Even though supply remains very tight, there are no buyers at these prices,” a trader said.

Polyethylene (PE)

More Saudi Arabia producers implemented large hike on March shipment cargoes to Southeast Asia, which again attracting very little buying interest. A number of traders and distributors contacted by CommoPlast are complaining about the difficulty facing in closing deals as regional buyers hold strong belief that some discount shall become available in the near term.

It is worth noting that some re-export LDPE film cargoes from China are showing up in Vietnam at relatively competitive levels. At the meantime, supply for this grade in local market is also comfortable, and therefore, buyers are very reluctant with Malaysian cargoes priced in the range $1350-1380/ton CIF Vietnam, LC AS term.