Asia Daily PP and PE Overview – 9 May 2018

CHINA

• Lack of inventories pressure continue keeping PP, PE prices on stable to firmer track 
• Firmer import offers find it tough to gain acceptance 

Polypropylene (PP)

Domestic spot offers for homo-PP continue to gain CNY50-100/ton ($8-16/ton) from the previous trading session given that local producers are not under any inventories pressure. Total stock at Sinopec and CNPC’s warehouses fell 25,000 tons to approximate 765,000 tons as of 9 May 2018 thanks to steady restocking activities, mostly among traders. 

In the import market, offers for Saudi Arabia homo-PP yarn reached $1260-1280/ton CFR China, LC 0 -60 days term with limited transaction observed. “Import cargoes are loosing competitiveness against the local materials. We have comfortable inventories from the previous replenishment and in no rush to make fresh buy now. Demand for our end product is not strong, however, we do expect to see better condition in June,” a straw maker reported.   

Polyethylene (PE)

The withdrawal of the USA from the nuclear deal with Iran and its plan to re-impose related economic sanctions on Iranian energy, auto and finance sectors stem little concern among Chinese players. Couple of Iranian traders have assured buyers that cargoes would continue to arrive the market smoothly as other world powers are still sticking to the accord. 

Import HDPE to China has surged above the $1350/ton mark after active purchasing activities for USA cargoes reported earlier this week. “The HDPE market is returning to the previous highs and it is risky to accept this level. We prefer to wait and see on the sideline,” a trader received Uzbekistan HDPE yarn at $1425/ton, CFR China, TT in advance said.

SOUTHEAST ASIA 

• Import PP and PE remains on the stable to firmer track 
• Indonesian buyers started looking into import LLDPE film as BMTDP renewal completing 

Polypropylene (PP)

Overseas suppliers started offering limited quantity of homo-PP to the region at stable to firmer levels though transactions remain thin. Deals for Omani yarn grade are observed at $1275-1280/ton CIF Vietnam, LC AS term with a market source added, “The available quantity is very small and only converters accept the current market levels. Vietnamese buyers are watching out for the start-up at Nghi Son Petrochemical’s 370,000 tons/year PP unit, which is expected to start offering commercial cargoes by late May.” 

In Indonesia, dutiable homo-PP cargoes are ranging $1270-1290/ton CIF, LC AS term and buying interest is evidently soft given the fact the local materials are widely available at competitive levels. Similar to Vietnam, Indonesian buyers are very cautious about fresh replenishment given that end product businesses are not as strong as expected. “Suppliers might keep offers firm, however, there is little support from the demand side. This leads us to two questions: the sustainability of the trend and the extent of any further increases,” an Indonesian converter commented. 

Polyethylene (PE)

Several Indonesian buyers reported to have received the renewed BMTPD from the government and started looking at import LLDPE film amid persistent supply shortage in local ground. Deals have been achieved at $1160/ton for Indian cargoes and $1170/ton for Saudi Arabia LLDPE film, all based on CIF Indonesia, LC AS term. “We are monitoring further development and remain hopeful that the shortage in local ground would general positive effect on import market,” an international trader said.

Meanwhile, import HDPE film offers to Vietnam have all gained ground, from which regular suppliers become more reluctant to accept bids at below the $1350/ton threshold. In the same time, buyers are adopting more cautious stance as it is traditional off-peak season and a number of buyers have already stocked up comfortable inventories from the previous purchases.