Asia Daily PP and PE Overview 11 July 2018

CHINA

• Local LDPE film shows sign of stabilizing, import market takes a break from down trend 
• Limited movement in the PP sector as trade war heightened 

Polypropylene (PP)

Spot market inch slightly higher thanks to the support from stronger futures market, however, transactions are rather disappointed. Total inventories at Sinopec and CNPC warehouses fell only 10,000 tons day on day to 710,000 tons as of 11 July 2018. 

The trade conflict between China and the USA is now reaching a new level, which spread more fear among market players. Sources therefore, are refraining from taking USA cargoes at the moment. 

Polyethylene (PE)

Domestic LDPE film market started to regain some stabilization after weeks of moving lower as a result of weak demand and lengthy supply condition. Traders in Northern China area reported healthy sales results for cargoes priced at the lower end of the overall price range as agriculture film converters seek low costs material ahead of the traditional high demand season. “Yet, we need this condition to sustain in the medium term in order to deplete the current inventory level,” a trader said.

Meanwhile, import LLDPE and HDPE film takes a break from the downtrend with Indian LLDPE film priced at $1080-1100/ton no longer available in the market, instead, latest offers have reached $1110/ton CFR China term. “This is because the supplier has depleted a good quantity and currently free from sales pressure,” a trade said. Chinese players reported earlier that major Indian maker sold approximate 20,000 tons of LLDPE film to China during this price cut.    

SOUTHEAST ASIA 

• Non-dutiable homo-PP continue inching lower in Vietnam 
• Sentiment remains weak as new wave of trade war swept through the region 

Polypropylene (PP)

Import homo-PP from Thailand and Indonesia to Vietnam continue to witness a minor drop of $10/ton compared to earlier this week, sending the latest offers to the range $1275-1285/ton CIF Vietnam, LC AS term. Taking into account the 3 per cent import duties, these cargoes are deemed competitive at the moment, and yet, purchasing interest is not very strong. “We prefer to take a cautious stance amid the rocky international trade condition, which might drag the market lower in the near term,” a converter said. 

In the meantime, several domestic traders decided to slash local prices for homo-PP yarn originated from Thailand by VND400,000/ton ($17/ton) day-on-day to VND33,400,000/ton ($1314/ton without VAT), FD Vietnam, cash equivalent. “This is very alarming as sellers should have lifted prices in line with the depreciation of the local currency. This is why local traders are very cautious about new purchases,” a trader said.      

Polyethylene (PE)

There is limited movement in the regional PE market after the dip in HDPE film prices observed in the previous trading day. Buyers are reluctant to enter deals fearing that the heightened trade war between the USA and China would drag market lower in the near term.

“Demand for our end product is yet to pick up and with the current exchange rate, we have little intention to procure additional cargoes from import market. There have been some reduction in the offers, yet we do not find it too attractive,” an Indonesian buyers received Singaporean HDPE blow moulding at $1520/ton CIF, added.