Asia Daily PP and PE Overview 3 July 2018

SOUTHEAST ASIA 

• Fewer import homo-PP offers as suppliers withdraw to sideline
• Indian LLDPE film make new market lows, import HDPE film faces pressure 

Polypropylene (PP)

There are very few import homo-PP offers across Southeast Asia region as the week proceeds, especially from Middle Eastern suppliers, who were aggressively pushing out quantity in the previous week at reduced prices. Most suppliers are now on the sideline to monitor further development after releasing substantial pressure given that energy complex has hit the highest levels since 2014. 

The calmness in the import market this week is also partially due to the absence of Chinese sellers, who are returning to the local ground to capitalise on the strengthening Dalian Commodity Exchange while production issues have curbed export allocation from a major Indonesian maker. 

“Market might remain stable throughout this week to watch the trade tension between China and the USA taking place. A rebound is less likely at the current market condition as buyers are still shy of current prices. We are taking a very cautious stance now,” a regional buyer said.

There have been reports that Indonesia’s Chandra Asri Petrochemical has encountered some unspecified technical glitches at its 480,000 tons/year PP line, from which the maker is attempting to sell homo-PP yarn in the local ground at above price list levels.       

Polyethylene (PE)

While purchasing activities for import LLDPE film in Southeast Asia appears to be satisfactory at a certain price level for regular Middle Eastern cargoes, such condition might soon face a bumper as Indian LLDPE film emerged in Vietnam at $1125-1135/ton, CIF, LC AS term, creating a new market low this week. Buyers started putting a question on the bottom levels following the offers, which might, in turn, limit the purchasing quantity. 

In the meantime, more suppliers become willing to reduce HDPE film prices below the $1350/ton threshold in spite of the persistently tight supply condition as buyers hold tight to the wait and see attitude. “We have cut Kuwait HDPE film prices to $1345/ton CIF Vietnam, LC AS term this week and buyers are placing bid at $15/ton lower. Thailand materials are still lingering at $1340-1350/ton levels, making it difficult for deep-seas cargoes to compete,” an international trader said.