Asia Daily PP and PE Overview 23 April 2018

CHINA

• Slow trading activities as players are away for ChinaPlas
• Limited new offers and new discussion might only emerge in the coming week

Polypropylene (PP)

Total PP and PE inventories at Sinopec and CNPC warehouses rose 60,000 tons over the weekend to approximate 860,000 tons as of 23 April 2018. There are very limited discussions in both local and import ground as players are away for ChinaPlas Exhibition. The calm sentiment has encouraged suppliers to offer CNY50/ton ($8/ton) discount on spot cargoes, though players are more willing to discuss deals after the Labour Day holidays. Such situation might cause inventory accumulation at producers’ side, which might depress prices in the near term.

Polyethylene (PE)

Very few suppliers have announced fresh offers and yet market generally places a brighter expectation on HDPE than other PE grades. “Strong demand from pipe sector might continue to encourage production switch while supply for LLDPE and LDPE is rather comfortable, and yet both agricultural film and flexible packaging sectors are in its off-peak season,” a market source said.

Chinese traders are discussing with USA suppliers regarding the trading term in the coming months amid looming trade war between the two countries. “We will be meeting several USA suppliers in May to further negotiate the transaction term in the event the current trade tension escalated. Meanwhile, we prefer to adopt a conservative stance toward these cargoes,” a trader said.  

SOUTHEAST ASIA 

• Sentiment is cool ahead of ChinaPlas and major holidays
• Overseas supplier affirm intention to lift PP, PE prices, demand shows little support

Polypropylene (PP)

There are very limited new offers observed on the first trading day of the week and yet overseas suppliers once again affirm the intention to lift the next offers. “We might not offer any import homo-PP to Southeast Asia this week, as we are attending ChinaPlas. In the meantime, we are looking at $10 – 20/ton increased on the next price announcement since availability for Middle Eastern cargoes is rather tight. Customers might have no choice but the accept the hike,” an international trader said.

In domestic Indonesia, major local producer surprisingly keeps new weekly offers unchanged after achieving healthy sales result in the previous week. “We are a little disappointed and might lift prices individually this time given the fact that we are having low stock on hand. With the current market situation, we think buyers would accept firmer offers,” a trader said.

Polyethylene (PE)

There is only a few new import offers for PE observed across Southeast Asia, mostly at stable to firmer levels compared to last week. However, transactions are thin, especially in Vietnam, as buyers are mostly taking wait and see stance ahead of the three consecutive holidays on 25, 30 April and 1 May. 

“We have not given any offers so far. The market is quiet and our latest attempt to lift PE offers has not resulted in any satisfactory outcome. At the moment, we prefer to monitor further development while keeping prices steady,” a trader offered Middle Eastern HDPE film at $1345/ton CIF Vietnam said.

In the meantime, major regional metallocene PE suppliers have given new price indication with increases and an Indonesian buyer said, “We were informed that Thailand mPE might surge $70/ton week on week however, we find it very hard to accept. The Ramadan season is just around the corner and very likely that the current momentum might lose steam in May.”