Asia Daily PP and PE Overview 2 May 2018

CHINA

• Local market remains firm in the post-holiday term
• Import offers mixed and buyer’s resistance remains stiff 

Polypropylene (PP)

Thanks to the strong come back on the Dalian Commodity Exchange, domestic spot suppliers have full support to implement CNY100/ton ($15/ton) hike on spot homo-PP cargoes on the first post-holiday trading day. The market is active, however, buyers are more into checking latest prices while real transactions are thin. Suppliers, on the other hand, show very optimistic expectation for the near term outlook citing the low inventories pressure. “Deals are limited, but the near-term demand prospect is rather bullish. Total PP and PE inventories at Sinopec and CNPC warehouses only reach 860,000 tons throughout the long weekend holidays and therefore we prefer to hold our offers steady for now,” a trader said.

In the import market, official offers for Indian and Saudi Arabia homo-PP are reported at $1220/ton CFR China, LC 0-60 days term, however, traders are attempting to price these cargoes at $20/ton higher. “Demand for import homo-PP is very grade specific and despite the constant firming trend in local ground, domestic materials remain competitive,” a buyer commented after refused to enter deals for Saudi cargoes. 

Polyethylene (PE)

Import PE to China is rather mixed. While traders are lifting Kuwait HDPE film to China to $1400/ton CFR term, a major Thailand producer stepped back on the weekly prices by $5/ton, bringing latest offers to $1415/ton CFR China, LC AS term for the same grade. Buyers have not responded positively to the latest price adjustment with a market source said, “The price cuts are mainly due to the stiff resistance throughout the past two weeks. More discount might become available on deals in the next trading days.”

SOUTHEAST ASIA 

• Market remain firm after the Labour Day holiday 
• Buyers show disinclination over PE cargoes as ethylene costs weakened

Polypropylene (PP)

A major Saudi Arabia producer lifted homo-PP offers to the region by $30/ton from last month to $1270/ton CIF Southeast Asia, LC AS term and no deals have been achieved immediately. However, suppliers are very steadfast in holding PP offers firm citing the general supply tightness across the global market.

In the meantime, non-dutiable cargoes priced above the $1300/ton threshold are facing strong resistance with a major Thailand maker informed, “We are unable to conclude any deal for homo-PP at the offered levels of $1330-1340/ton CIF Indonesia, LC AS term. Buyers are still placing more favour on domestic materials and in spite of the lack of availability, we remain conservative about the near-term outlook.”

Polyethylene (PE)

Purchasing activities in domestic Indonesia remain strong and it seems that the panic buying condition is getting worse. Supply for LLDPE film is short in this market given that both major local producers are unable to meet market requirement. “Many customers called in this afternoon. We are only able to delivery cargoes a month from now due to lacking ready quantity. We are planning to implement another price hike in the coming day,” a trader said.

The import PE market is not sharing the same sentiment. The falling ethylene costs are dampening suppliers’ effort in lifting May shipment offers and regional buyers are very reluctant in making replenishment. A major Saudi Arabia producer announced new PE prices at a stable to $10/ton higher from last month, reaching $1360/ton for HDPE film and $1180-1190/ton for LLDPE film, CIF Vietnam, LC AS term. “We have not received any good bids until now. Most buyers are still on the wait and see position, making it a little bearish for the near-term outlook. We believed that a discount of $20-30/ton must be made available in order to attract buying attention,” a distributor said.