Asia Daily PP and PE Overview 5 April 2018

There are no trading activities in China as players are away for Tomb-sweeping holiday. Market shall resume on 9 April 2018.

SOUTHEAST ASIA

• Indonesia market remains in sluggish condition
• Vietnamese traders attempted to lift local prices as import market stabilises

Polypropylene (PP)

While Middle Easter suppliers are keeping firm stance on import homo-PP cargoes in the range $1240-1260/ton to Indonesia, Southeast Asian sellers have stepped back on the prices in order to conclude deals. In fact, buyers reported purchasing Vietnamese cargoes at $1280/ton CIF Indonesia, LC AS term, which again narrows down the price gap between dutiable and non-dutiable cargoes.

Meanwhile, domestic suppliers continue to sell locally produced homo-PP yarn cargoes at IDR17,400,000/ton ($1262/ton) without VAT, FD Indonesia, cash equivalent, making it very difficult for overseas sellers to achieve satisfactory sales results in this market.

In Vietnam, local traders are attempting to lift homo-PP prices by VND300,000/ton ($13/ton) compared to earlier this week given firmer import ground. After the initial resistance, buyers started to show better respond, yet real deals remains weak. “We think the market has hit the bottom and likely to remain on the stable to firmer track in the near term. Further hike would be in place in the coming week if Chinese buyers return from holiday with good purchasing appetite,” a local trader commented.

Polyethylene (PE)

After active purchasing in the previous sessions, the market appears to be calmer now. The escalated trade tension between China and the USA has now had China tangled several petrochemical products including LDPE, LLDPE, propane and ACN from the USA into potential 25% import tariff. Players are assessing the potential impact of the event on the regional market, though generally becoming more cautious. A buyer purchased Thailand cargoes at $1160/ton for LLDPE film and $1330/ton for HDPE film, CIF Vietnam, LC AS term reported, “Market outlook is very cloudy, hence we only purchased 100 tons for each grade.”

While there are still many questions regarding the price direction would Chinese government apply the planned tariff, market participants are conjecturing a possibility of a firmer trend. “Chinese buyers would seek cargoes from other origins and help to keep market firm, while USA producers might need to find new export outlets for the newly started up plants,” a source said.