Asia Daily PP and PE Overview 6 March 2018

CHINA

• Purchasing activities remain mediocre, traders faces bloated inventories level
• LDPE film market seems weaken

Polypropylene (PP)

Total PP and PE inventories at major local producers’ warehouses drop 50,000 tons day on day to approximate 945,000 tons as of 6 March 2018. Southern China market continues to see satisfactory number of deals for homo-PP compared to other area in the country, yet it is not sufficient to boost domestic prices. Bloated stock levels encourage traders to offers up to CNY100/ton ($15/ton) discount to speed up sales process.

There are very limited numbers of new offers observed in the import market while Chinese suppliers are eyeing export and re-export opportunity. “Southeast Asian buyers are unable to accept our current offers and therefore, we are looking at South Asia as alternative destination,” a source said. 

Polyethylene (PE)

The LDPE film market seems weak due to comfortable supply condition. Major Qatari maker slashed offers for import LDPE film by $20/ton week on week to $1220/ton CFR China, LC 60 days term. “And our regular customers are still not showing much interest. We are not having any LLDPE film cargoes this week, yet we do not see strong demand for this grade, too,” a source close to the produce said.

SOUTHEAST ASIA

• General demand condition remain sluggish across the region
• Overseas sellers adjusted prices or diverted cargoes to other markets
• Export/re-export PP cargoes from China continue to emerge

Polypropylene (PP)

Major Saudi Arabia producer stepped back on homo-PP prices by $30/ton and PP block copolymer by $40-50/ton from initial price list given in the previous week due to disappointed demand condition. At the meantime, export and re-export homo-PP from China continue to show up at $1320-1330/ton for non Chinese origin and at $1280-1290/ton for Chinese material, all based on FOB China, LC AS term. “Though prices are still high, it indicates the weakness in China. We prefer to wait and see on the side-line,” a regional buyer said.

In Indonesia, the recent rebound in homo-PP prices continues facing strong resistance. On the other hand, major international suppliers claimed to have diverted most of the cargoes to other markets, especially to Pakistan, where the margins and demand are better. “Indonesian buyers are unable to accept the current market levels. We might put more attention to other export destination until demand here is better,” a producer said.

Polyethylene (PE)

Saudi Arabia maker cuts HDPE and LLDPE film prices by $20/ton, bringing latest offers to $1430/ton and $1250-1260/ton respectively, CIF Vietnam, LC AS term. While many Vietnamese buyers are still showing little interest in placing orders at the adjusted price levels due to comfortable on-hand stock at lower costs, distributors are planning to ask for additional discounts. “Demand remains very sluggish and without additional price cuts, it is hard to deplete the higher quantity available,” a source said.

“We even have to cut local prices by VND200,000/ton ($9/ton) in order to stimulate demand, and hence having no confidence to make any replenishment at the moment. We fear this condition might persist in the coming weeks as market is entering the traditional slow season,” a Vietnamese trader informed.