Asia Daily PP and PE Overview 26 June 2018

SOUTHEAST ASIA 

• Import homo-PP and HDPE film to Vietnam inch lower
• Domestic Indonesia mixed after the holiday 

Polypropylene (PP)

Import homo-PP to Vietnam remains on the stable to softer track with non-dutiable cargoes witness reduction this week. In fact deals for Indonesian homo-PP yarn are reported that $1300/ton CIF Vietnam, LC AS term, which has a detrimental effect of the general market sentiment. “We purchased 150 tons of Indonesian cargoes at $1300/ton CIF Vietnam, LC AS term which is equivalent to approximately $1265/ton for Middle Eastern materials given the import duties gap. As a result, we do expect to see some reductions in offers for dutiable origins in the near term,” a buyer reported.

In the meantime, deals for regular homo-PP from China continue to stand at $1290/ton CIF Vietnam, LC AS term – a $10/ton drop day-on-day, though many buyers are asking for additional discounts. Both Chinese and Indonesian homo-PP becomes more available in Vietnam market over the past couple of weeks as local demand starts to wean amid the traditional off-peak season.

Domestic suppliers in Indonesia continue to forward selling homo-PP cargoes for July delivery at IDR18,900,000/ton ($1333/ton) without VAT, FD Indonesia, cash equivalent. The attractive offers do not seem to stimulate trading activities to the expected levels; however, it does give overseas sellers a tough time trying to penetrate this market. 

Polyethylene (PE)

Thailand HDPE film offers unexpectedly fell below the $1350/ton threshold in Vietnam, which stir heavy concern among players here. “Most other Middle Eastern cargoes are still priced at around $1380/ton level and that make Thai cargoes more competitive given the shorter shipping time. We purchased a small quantity at $1340/ton CIF Vietnam, LC As term while waiting for further reduction,” a buyer informed. Other market players have started leveraging on the latest development and become more aggressive in bidding for other cargoes.

Inside Indonesia, the LLDPE film shortage is getting severer as both major producers here are unable to restore regular operation rate after the shutdown earlier this month. A number of converters have returned to make additional purchases at IDR20,700,000-21,000,000/ton ($1458-1479/ton) without VAT, FD Indonesia, cash equivalent. The upward adjustment in LLDPE film offers partially due to the depreciation of the Indonesian Rupiah, sources said, however, supply played a larger part. “Despite the high prices, the suppliers only able to allocate 5 tons of material to each buyer. We are looking at import market as an alternative,” a buyer commented.