Asia Daily PP and PE Overview 23 May 2018

CHINA

• Domestic spot PP, PE market continue to gallop lower 
• Irregular PE cargoes emerged in China due to attractive margins 

Polypropylene (PP)

The softening trend in domestic ground continues taking place as floppy futures market gives players no confident in the near-term outlook. Spot PP and PE see another CNY50-100/ton ($8-16/ton) reduction from the previous trading day while purchasing activities remain below satisfactory.

“We started offering export cargoes again at $1300/ton FOB China, LC AS term, however, Southeast Asian buyers do not seem to have strong interest. We are watching out for further development in the local ground before adjusting prices,” a Chinese trader said.

In the meantime, import homo-PP to China seems to have softened slightly compared to earlier this week with Indian cargoes concluded at $1245-1250/ton CFR China, LC 60 days term. “Falling domestic offers and futures market is pressurizing oversea sellers. We managed to obtain some discounts today and might only purchase again in the coming week,” a buyer said.

Polyethylene (PE)

Import HDPE film cargoes originated from Egypt appear in the market at $1380-1390/ton CFR China and no immediate deals are observed. “Suppliers are more willing to offer small discount today following the constant drop in the domestic market. We prefer to hold a wait and see stance, hoping to obtain better prices in the coming days,” a converter said.

SOUTHEAST ASIA 

• Saudi major lifted import homo-PP to Vietnam
• Hike in import HDPE film see incremental acceptance 

Polypropylene (PP)

A major Saudi Arabia producer lifted import homo-PP offers to Vietnam by $10/ton from the previous week to $1300/ton CIF, LC AS term and subjected to 3 percent import duties. The move officially narrowed down the price gap with non-dutiable cargoes from Thailand and China to $15-30/ton, from which many buyers become more reluctant in entering transaction.  

Polyethylene (PE)

The regional PE market is rather calm and it appears that Vietnamese buyers have gradually accepted the latest hike on PE cargoes for June shipment. Suppliers for Thailand PE claimed having achieved deals at $30/ton increased on HDPE film at $1370-1380/ton, and $10/ton higher on LLDPE and LDPE film at $1190/ton and $1230/ton respectively. 

Thailand PE cargoes have been traded in Vietnam at relatively competitive levels over the past several months and while many other international traders, who are dealing with deep-sea cargoes constantly facing difficulties in concluding deals, this origin is gaining buyer’s attention. “We sold approximate 4,000 tons of Thailand PE cargoes this month and at the moment, more inquiries are coming in. Buyers are not aggressive, yet attractive prices and shipping time give these cargoes a competitive edge,” another distributor added.