Asia Daily PP and PE Overview 3 April 2018

CHINA

• Domestic momentum remains healthy
• Suppliers started lifting offers

Polypropylene (PP)

Total PP and PE inventories at major domestic producers’ warehouses fell 40,000 tons in a single trading day to approximate 880,000 tons as of 3 April 2018, highlighting the continued improving demand condition in this market. Suppliers, therefore, introduced another CNY50-100/ton ($8-16/ton) hike on the latest offers, some even limit the selling quantity in expectation for higher prices in just the matter of days.

“We have depleted considerable quantity of inventories and on the verge of making replenishment. Our customers are having good end product orders, which might keep market firm in the coming week,” a trader said. The source also added firmer import marker in the support of stronger local ground in recent days.

Polyethylene (PE)

In a positive aspect, a number of converters in the mulch film sector reported having a good number of end product orders and many are operating at full rate. As a result, most Middle Eastern suppliers claimed to have sold out import LLDPE film to China in the previous week, and at the moment, prices below the $1150/ton threshold have not repeated.

Thailand maker lifted import LLDPE film to China by $10/ton from last week to $1250/ton CFR China, LC AS term. Deals have emerged almost immediately after the price announcement; however, purchasing interest might slowly cool down in the coming week. “We have obtained more than 3000 tons of LLDPE film from various origins in past week and might withdraw to the sideline for now. The market condition in the coming week will be the main factor determining our next decision,” a trader said.

SOUTHEAST ASIA

• Import LLDPE film and homo-PP to Vietnam might have found the bottom
• Local suppliers forward-selling PP cargoes in Indonesia

Polypropylene (PP)

Demand for import homo-PP in Vietnam surprisingly pickup after prolong period of bearing dullness condition. Buyers accept prices, which they resisted in the previous week amid the recent pick up in demand in China and the lack of new offers from major suppliers. A major Saudi Arabia producer claimed to have sold all available quantity of homo-PP yarn at $1240/ton CIF Vietnam, LC AS term while Indian homo-PP increased $15/ton from last week to $1250/ton. “There are very limited offers in the market. We have comfortable stock until the end of May, hence might monitor the sustainability of the current trend before making any major decision,” a converter said.

In Indonesia, major suppliers are forward selling homo-PP cargoes for May delivery though prices are not very low. Buyers are planning to make new replenishment from the local ground now it seems that demand in China and Vietnam is on the up-cycle.

Polyethylene (PE)

Similar to homo-PP, import LLDPE film to Vietnam is also gaining flame, though most deals are at $1150/ton CIF, LC AS term. “Buyers are very active, and we managed to sell out the quantity,” a distributor added.

The latest development has just reinforced supplier’s intention to implement small to moderate hike on the next price announcement. “Market is picking up its pace and we think the near-term prospect is rather positive. We are planning a $20/ton increased on Middle Eastern LLDPE film in the coming week,” an international trader said.