Asia Daily PP PE Report 06 Apr 2016

In China, futures prices on Dalian Commodity Exchange extended the weakening trend as both contract for PP and LLDPE settled at lower levels. September delivery contract for PP slashed CNY68/t ($10/t) to CNY6910/t ($911/t without VAT) while LLDPE contract subtract another CNY175/t ($27/t) from last week’s gain to settled at CNY8445/t ($1114/t without VAT).

Domestic spot offers one more time defeated all the loses recorded in the futures trading to advance CNY100-200/t ($15-31/t) on PP and HDPE cargoes while LLDPE trail behind with only CNY50/t ($8/t) gains. However, players are complaining about slower trading activities and some measures such as discounts are given by traders to entice demand.

A distributor in Xiamen commented, “Local sellers are not under great pressure as domestic inventories are not high. Yet, buyers are not in hurry to make fresh replenishment and this does not look so good for the market. We are not felling so optimistic about the near term outlook, especially ChinaPlast is around the corner.”

There are little changes in the import market and sellers are still underway to divert their cargoes to other region for better profit margins. A Shanghai based trader said, “Most international sellers are not very interested in China market these days considering such limited number offers amid fragile buying interest. We are seeking new export outlets with hope to improve netback without any downward adjustment expectation. In fact, we believed that the number of plant shutdown this month would counterbalance the current demand condition.” Traders maintain offer for dutiable homo-PP at $1030-1050/t CFR China, LC AS term yet reported difficulties in concluding any deal since market re-open this week.

In Southeast Asia, market sentiment is steadily following the firming trend despite growing resistance from buyers. Players active in PE trading in Vietnam reported receiving a number of re-export HDPE film offers from China for end of April loading at the range $1230-1250/t, CIF Vietnam, LC AS term. A trader commented, “The offered quantity is not small and we think that buying appetite in China is weakening. Demand for HDPE film in local market is not as strong as other grades and we literally making losses if accept this level. Ethylene monomers started to move lower and this might affect the sentiment in the near term.” Meanwhile, regional supply remains tight at the background and encouraging sellers to implement further price increment on their cargoes. A trader selling PE to European market received Thailand HDPE offers at  $1280/t FOB Thailand, LC AS said, “Most producers in S. Asia are either having production issues or have oversold previously from which we expect the supply would only normalize in May-June period. Without sales pressure, sellers might aim for $1300/t level on their PE cargoes in the near term in order to balance with the current ethylene costs.”

For detail Daily Prices in China and Southeast Asia market, kindly visit our website at www.commoplast.com. Please contact our representatives at commoplastinfo@gmail.com for log in assistance.

In the PP market, more offers are observed in the market today at relatively stable level compared to last week. Vietnamese buyers were receiving Saudi homo-PP at $1110/t CIF term at the beginning of the week and today a source informed, “Our supplier initially only offered $20/t discount on deal, however buyers are very reluctant in making fresh purchases amid weakening local market, therefore we received confirmation today that $40/t discount would be available for serious buyers. We feel very uncertain about the outlook in the near term and refraining from replenishment now.” Meanwhile, a major local maker in Indonesia has lifted their domestic offers for homo-PP by additional $20/t after some $35-55/t hike at the beginning of the week. A trader in the country added, “Market is not responding so much to the new price increment since buying interest is diminishing. We expect local supply to be eased slightly by mid of the month with the arrival of several large import cargoes, which might keep market on a more stable note in the near term.”