Asia Daily PP and PE Overview 5 July 2018

CHINA

• Import LLDPE film plunged to nine months low
• Sentiment stalls as players watch out for trade splash 

Polypropylene (PP)

As the futures market settled lower, sentiment in the spot market is also affected. Traders inEastern China area offer up to CNY150/ton ($23/ton) discount sending the latest spot homo-PP prices to CNY9150-9250/ton ($1188-1201/ton without VAT), EXW China, cash equivalent. 

Chinese buyers are monitoring the 6 July 2018 landmark as the USA and China are all set to impose 25 per cent tariffs on imports from each other. “Financial market is set to get hit and we only make small purchases this week,” a trader said.

Polyethylene (PE)

In the PE market, import LLDPE film plunged to the lowest levels since early November 2017 with Indian cargoes concluded at $1100/ton CFR China, LC AS term. The producer reportedly sold out at the latest prices and therefore, buyers here are asking for similar price level from other makers.

“We managed to obtain regular Saudi Arabia LLDPE film at $1110-1120/ton CFR China term. We think the market might not drop any further in the coming days given the fact that purchasing activities improved visibly at these prices,” a trader informed.

SOUTHEAST ASIA 

• Thailand homo-PP slipped below $1300/ton threshold in Vietnam 
• Regional PE market rocked by falling prices in China 

Polypropylene (PP)

Vietnamese buyers reported having concluded deals for Thailand homo-PP yarn and injection at $1295/ton CIF, LC AS term, while a lower grade from this origin is transacted at $1290/ton with the same term. Taking into account the 3 per cent import duties, this would signal a possibility that dutiable cargoes might have to go down further. “We are buying and waiting at the same time. The market is slow and very likely that prices could drop further in the near term,” a converter said.

In fact, Vietnamese buyers are now bidding for a remaining Saudi Arabia homo-PP injection cargo at $1240/ton CIF, LC AS term. “And for Chinese coal-based homo-PP yarn, our customers are bidding at $1250-1260/ton. Customers are placing orders each time prices go down, however, the general sentiment is dull,” an international trader informed.

Polyethylene (PE) 

As import LLDPE film to China plunged to the multi-month low levels, Southeast Asian buyers are now on the wait-and-see position with a strong expectation that new offers would go down in a matter of days. Traders are now facing more hurdle in convincing buyers to accept the current prices following the development in the nearby China market.

In the meantime, Saudi LDPE film is transacted in Vietnam at $1160/ton CIF, LC AS – a $20/ton dropped from the initial price list. “Looking ahead, we are not confident about July outlook, and therefore, we plan to limit purchases further,” a buyer said.