Asia Daily PP and PE Overview 11 April 2018

CHINA

• Better deals for import PP and PE cargoes 
• Local inventories depleted in quicker rate

Polypropylene (PP)

Trading activities in domestic ground remain healthy, which reflected in a reduction of 40,000 tons in total PP and PE inventories at Sinopec and CNPC’s warehouses to approximate 800,000 tons as of 11 April 2018. With sales pressure draws lower, traders decided to introduce up to CNY150/ton ($24/ton) increase on spot homo-PP cargoes, bringing prices to CNY‎‎‎‎8900-9100/ton ($‎‎‎1211-1238/ton without VAT).

There has been better number of deals for import homo-PP cargoes originated from the Middle East in the range $1190-1200/ton CFR China term, thanks to continued recovering demand condition in the local market. “This is very much in line with our expectation. Overseas sellers might attempt another hike in the coming week if sentiment in local ground remains healthy,” a market source commented. 

Polyethylene (PE)

With news that Iranian Laleh Petrochemical and Marun Petrochemical are planning a month-long maintenance shutdown at their HDPE lines, which normally produce blow moulding grade, a number of Chinese traders are speculating on these cargoes by suspending spot offers with expectation for higher prices in the near term. 

An Iranian trading house added, “We are focusing more on selling HDPE pipe in local Iran market given healthy demand here. As a result, we expect a drop in Iranian cargoes to China in the coming month.” 

SOUTHEAST ASIA 

• Import homo-PP to Indonesia struggles to recover 
• Vietnamese traders put heavy effort to lift local prices 

Polypropylene (PP)

While Vietnam and China markets are witnessing a rebound in import homo-PP offers, Indonesia is still struggling to keep up with the pace. Instead of following the regional trend, Southeast Asian suppliers are cutting offers to Indonesia in a fierce competition with local sellers while demand persistently sluggish. Following CommoPlast observation, homo-PP yarn originated from Philippines, Vietnam and Singapore are ranging at $1270-1290/ton CIF Indonesia, LC AS term. In contrast, Middle Eastern cargoes are firm at $1250-1260/ton with the same term.

Coming back to Vietnam, buyers here have accepted the latest hike with deals for Saudi homo-PP are reported at $1250/ton CIF, LC AS. It is important to note that though the market is inching higher, buyers are very cautious about making large replenishment amid slow end product demand. Sources are not positive about the possibility that prices for dutiable cargoes could surge above the $1300/ton threshold.    

Polyethylene (PE)

More suppliers started offering PE cargoes to the region and most offers are seen at the stable to firmer levels compared to last week. Thailand cargoes are available at $1180/ton for LLDPE film, $1220/ton for LDPE film and $1320/ton for HDPE film, all based on CIF Vietnam, LC AS. “We are placing bids at $20/ton lower for all grades. Demand in China is picking up, however, we are not willing to place a heavy bet on the sustainability of the trend,” a trader said.

Meanwhile, local Vietnamese traders are putting a heavy effort in lifting domestic sentiment and prices following the international market. “Local market is now lower than import, resulted in huge losses for traders. We rejected all lower bids and hope to convey clear messages to local buyers regarding the development in import ground,” a trader said. A number of other traders are implementing similar stance which might stir activities in the local ground.