Asia Daily PP and PE Overview 4 June 2018

CHINA

• Minimal changes in market sentiment and purchasing activities 
• Import PP inches slightly higher; PE remains stable to soft

Polypropylene (PP)

Import homo-PP to China reached $1265-1275/ton CFR, LC 0-60 days term on the first trading day of the week for Indian and Saudi Arabia cargoes. Several deals are observed at $1250/ton with the same term though overseas sellers are not very interested in this market due to lower profit margins compared to others.

In the local ground, purchasing activities are not strong in spite of the recovery in the futures market. Total PP and PE inventories at Sinopec and CNPC’s warehouses rose 70,000 tons over the weekend to approximate 810,000 tons as of 4 June 2018. “We maintain spot offers unchanged from last week while willing to discuss with serious buyers. Sales are slow though we remain optimistic about the PP market,” a local trader offer yarn grade at CNY9150-9250/ton ($1229-1242/ton without VAT), EXW China, cash equivalent, said. 

Polyethylene (PE)

Import PE to China continues to roll on the stable to softer track. Singaporean mPE witness $10-20/ton drop week on week to $1350-1370/ton and regular LLDPE c4 film is at $1220/ton CFR China, LC AS term. The initial respond toward the latest price list is not very strong as sources are concern over the state of supply for mPE in the local ground after a good number of cargoes arrived the market in recent weeks. “LLDPE film cargoes are very competitive for Southeast Asian origin, however, we must purchase in a bundle, and therefore, we are still considering,” a buyer commented.

SOUTHEAST ASIA 

• Limited transaction on the first trading day of the week 
• Indonesian market enters holiday mood 

Polypropylene (PP)

Import homo-PP offers are very limited on the first trading day of the week though most cargoes available at the moment are priced at unchanged levels from last week. In fact, a small quantity of Middle Eastern homo-PP shows up in the range $1300-1330/ton while Thailand cargoes are at $1340-1360/ton, all based on CIF Indonesia, LC AS term.

“There are some dripping deals for dutiable cargoes at $1300/ton, however, the market is generally calmer now. Regional buyers are resisting the current prices while in Indonesia and Malaysia, buyers are adopting more cautious stance given the fast-approaching Ramadan holiday,” an international trader said. 

Polyethylene (PE)

Indonesian buyers believed that the supply tightness condition that has been pushing the domestic market higher throughout the past two months might ease after the Ramadan holidays on the arrival of more import cargoes. Buyers here are gradually hibernating from purchases now and put more focus on getting the delivery done. 

“Road ban would take place on 12-14 June and therefore, we have to settle all delivery latest by 8 June. We have yet to receive new orders for post-Ramadan and therefore, refraining from keeping high raw material inventories, especially at the current market prices,” a flexible packaging converter said.

Meanwhile, a major Saudi Arabia producer managed to conclude a good quantity of PE to Vietnam after conceded to $10/ton discount on LLDPE film last Friday. “The supplier is withdrawing the remaining quantity from the market and would only make further decision later. Ethylene costs started to go down and this is not a good sign for the downstream PE market,” a distributor added.