Asia Daily PP and PE Overview 13 June 2018

CHINA

• Falling futures market impact spot sentiment 
• Import homo-PP hold firm with limited quantity available 

Polypropylene (PP)

Dalian Commodity Exchange records the first falling session this week today as September delivery contract for PP trimmed CNY68/ton ($11/ton) while LLDPE dropped CNY80/ton ($13/ton). Buyers in the spot market become less active following the development in spite of a reduction of CNY50/ton ($8/ton) in spot homo-PP offers. 

Meanwhile, import offers for Indian and Saudi Arabia homo-PP has reached $1270/ton CFR China, LC AS term. “We have sold some quantities for end of July shipment. Buyers are not aggressive in making purchases, however, we are not having any inventories pressure at the moment. The domestic ground does see some fluctuations in recent days, yet most are in small range. Limited supply is the main factor that prevents prices from any major fall at the current demand condition and might continue to be the support for near-term outlook,” a source commented.   

Polyethylene (PE)

The PE market is steady day on day and players are seeing a better transaction for HDPE injection grade. Import USA HDPE injection reached deals at $1240/ton CFR China – the levels that market resisted strongly previously. “Supply is not that comfortable, yet customers are unwilling to accept higher levels. We are carrying more quantity of LDPE and LLDPE film on hand at the moment, waiting for demand to come back,” a trader informed. 

SOUTHEAST ASIA 

• Overseas suppliers adopt softer stance on import homo-PP 
• Regional buyers await new PE offers 

Polypropylene (PP)

Overseas maker finally agreed to some discounts on import homo-PP to Vietnam this week, which is very much in line with player’s expectation. It is important to note that homo-PP yarn only sees a minor reduction as tight supply continue to provide support, however, injection grade faced larger cuts. Middle Eastern homo-PP yarn is reported at $1290-1320/ton CIF Vietnam, LC AS term.

In fact, Saudi Arabia homo-PP injection cargoes were offered in the previous week at $1300/ton CIF Vietnam, LC AS term, has now achieved deals at $1270/ton with the same term. “Our supplier is pushing out the final cargoes before going off for the Ramadan holidays. In the meantime, we are still having an optimistic outlook for the post-holiday term,” a distributor added.

Polyethylene (PE)

The regional PE market is rather quiet with limited offers available. Most buyers are waiting for new prices from international suppliers, which might only be announced by the final week of June, market sources said. “However, we expect July shipment offers for most PE grades to remain on the stable to softer track amid the lack of support from demand. Local ground inches slightly lower this week, especially for LDPE and LLDPE film, and therefore, we prefer to adopt a more cautious stance,” a trader commented.