Asia Daily PP and PE Overview 15 June 2018

CHINA

• Local demand remains sluggish ahead of Dragon Boat festival 
• Import PE market softens slightly on the availability of irregular cargoes 

Polypropylene (PP)

Trading activities in domestic spot market see little movement as converters are struggling with high raw material costs and slow end product orders. Falling futures market give additional hope that prices would witness continued downward adjustment in the near-term, creating a slower than expected discussion ahead of the long weekend holiday. 

Spot offer for homo-PP yarn in Eastern China down CNY50/ton ($8/ton) day on day to CNY9200-9300/ton ($1235-1249/ton without VAT), EXW China, cash equivalent. “Our customers are very reluctant to make new purchases despite knowing that some discounts would be made available for serious buyers. Therefore, we prefer to be cautious about stocking up additional quantity,” a trader said.

Total polyolefins inventories at Sinopec and CNPC’s warehouses fell only 5,000 tons from the previous trading session to approximate 685,000 tons as of 15 June 2018. 

Polyethylene (PE)

Import PE market inched slightly lower on the final trading day of the week thanks to the emergence of irregular cargoes. There are deals concluded for 300 tons of USA LLDPE film (cast film) at $1155/ton CFR China, LC AS term. “There are another 500 tons of this origin, which suppliers are collecting bids. We have sent a proposal at $1140/ton CFR China, yet got rejected,” a buyer commented.

In the meantime, Iranian HDPE film cargoes, re-exported from Turkey market show up in China at 1350-1355/ton CFR China, down $5-10/ton day on day, and deals have been achieved at the lower end of the price range. “The HDPE market is very grade specific at the moment. However, we think the market is facing minor correction,” a trader added.               

SOUTHEAST ASIA 

• Limited trading activities amid Eid Mubarak holidays
• Vietnamese buyers concern about July outlook as supply seems improve 

Polypropylene (PP)

Most international suppliers claimed to have concluded business for this week after conceded to small to medium price cuts in the earlier trading days. By the end of the week, import homo-PP to Vietnam has reached $1270-1290/ton for injection and $1290-1320/ton for yarn grade, all based on CIF, LC AS term. However, players are expecting further reductions in the coming weeks given improved supply condition amid falling demand during the off-peak season.

Domestic PP market in Vietnam sees VND100,000-400,000/ton ($4-17/ton) reduction on the final trading day of the week following the softening trend in import ground while supply seems improving. A healthy number of cargoes purchased previously at much lower costs have reached the market while the country’s second PP producer – Nghi Son Refinery and Petrochemical started offering trial quantity. Buyers are withdrawing to the sideline hoping to achieve additional discounts in the near term. 

Polyethylene (PE)

The regional PE market is calm in the absence of Indonesian and Malaysian buyers amid Eid Mubarak holidays. Players are not expecting to see more import offers in the coming week, especially from Middle Eastern suppliers. “In the meantime, demand in Vietnam is very sluggish. Buyers are not responding to the firming ethylene costs. Near-term outlook is not very bullish,” an international trader collecting bids for Middle East HDPE film cargoes at $1340/ton CIF Vietnam, said.