Asia Daily PP and PE Overview 4 July 2018

CHINA

• Local sentiment improved slightly 
• Chinese buyers continue putting pressure on import PE market 

Polypropylene (PP)

Thanks to stronger futures market, spot traders continue lifting homo-PP offers by CNY100/ton ($16/ton) day on day to CNY9200-9400/ton ($1194-1220/ton without VAT), EXW Eastern China, cash equivalent. Total inventories at Sinopec and CNPC’s warehouses fell 35,000 tons from yesterday to approximate 690,000 tons as of 04 July 2018, signalling a slightly better purchasing interest among local buyers.

“We are also exporting some quantity to South America and Africa, however the allocation is not too large. Local demand is not at desired levels as players are now putting more concern on the trade war and currency exchange rate,” a trader informed. 

Polyethylene (PE)

While persistently asking for the price level at $1080-1100/ton CFR China for Middle Eastern LLDPE film, Chinese buyers are also demanding for larger discount on HDPE film cargoes. An international trader reported to have received bids for Kuwait HDPE film at $1300/ton CFR China while adding, “We are only able to offer $10/ton discount from initial price list to $1320/ton CFR China, TT in advance. It is harder to attract deals at the moment as buyers tend to avoid currency risk.”

Another indicator for a slack HDPE market is that Thailand cargoes achieved deals with $40/ton discount from price list at $1350/ton for film and $1360/ton for yarn grade. “We took few hundred tons given the regularity of this origin. We would replenish again would the supplier agree to additional cut,” a buyer informed. 

Except several deals for Indian LLDPE film at $1110-1120/ton CFR China, no other transactions are seen lower than these levels at the time this report is published.  

SOUTHEAST ASIA 

• Regional PE market remains calm 
• Southeast Asian PP supplier soften stance on import cargoes to Indonesia 

Polypropylene (PP)

Import homo-PP to Southeast Asia remains limited by mid of the week, especially from Middle Eastern suppliers. However, Southeast Asian suppliers are softening stance on import offers to Indonesia market after a week of contradicting trend. Both Vietnamese and Philippines cargoes are dealt at $15-20/ton lower from last week, to $1300-1320/ton, all based on CIF Indonesia, LC AS term.

“We have not heard from Malaysian and Singaporean producers, who were lifting July shipment offers in the previous week. It is difficult to up-adjust import offers given the weakening Indonesian Rupiah against the US dollar,” a buyer said. 

Polyethylene (PE)

The regional HDPE film market is clearly cooling down though the latest prices cuts are rather minor. Besides the fact that several suppliers have stepped back on HDPE film offers to Vietnam, sending latest prices to below the $1350/ton threshold, couple of Southeast Asian makers have followed suit. 

In fact, both Singaporean and Thailand majors opened new prices to Indonesia with $20/ton reduction month on month to Indonesia, and yet buying interest is not as strong as expected. “The steep depreciation of the Indonesian Rupiah against the US dollar has not allowed the price cut to shine. The supply is not lengthy; we are just unwilling to bear the currency risk,” a buyer said, while reported receiving HDPE film originated from Singapore at $1520/ton and from Thailand at $1480/ton, all based on CIF, LC AS.