Asia Daily PP and PE Overview 19 July 2018

CHINA

• Domestic demand for LLDPE, LDPE film remains steady with a bright prospect 
• Further depreciation of the Chinese Yuan might taper demand for imports 

Polypropylene (PP)

Import homo-PP offers for Indian origin drop $10/ton from earlier this week to $1220/ton CFR China, LC 60 day term and limited transactions are observed. The Chinese Yuan is at its lowest level against the US dollar in a year, which sparks more concern among Chinese buyers. “It does look like the Chinese Yuan might depreciate further making it more expensive to buy imports at the moment,” a trader commented. 

Meanwhile, BOPP converters are still suffering from slow end product businesses and many have expressed the unwillingness to accept local homo-PP cargoes priced above the CNY9300/ton ($1190/ton without VAT), EXW China, cash equivalent.

Polyethylene (PE)

In contrast to the sluggish condition in the PP sector, players in the PE market continue seeing stable demand for LLDPE and LDPE film in Northern China area. Some agricultural film converters reported having already received 50 per cent of last year’s order at this point of time, and therefore, might continue making replenishment in the near term.   

SOUTHEAST ASIA 

• Import PP market continues to track stable to softer trend 
• Indian PE cargoes dived to mark a new low in Vietnam market 

Polypropylene (PP)

Import offers for non-dutiable cargoes to the region continue to see minor discounts of $10/ton from last week while major Saudi Arabia producer rollover offers to Vietnam at $1250/ton for injection and $1260/ton for yarn grade, all based on CIF, LC AS term. The final prices were set at $10/ton below initial price list and it come to no surprise that many buyers have dropped replenishment this week.

“The supplier rejected our bids at $1240/ton for yarn grade claiming limited allocation. The downward pressure is still strong and therefore, we decided to just wait and see,” a buyer commented.  

Polyethylene (PE)

An Indian producer opens fresh offers for LLDPE film at $1100-1110/ton and HDPE yarn at $1270/ton CIF Vietnam, LC AS. Players become actively discussing the latest price list with several sources sound confident that deals for LLDPE film could breach below the $1100/ton threshold. The supplier has not officially set final prices. Meanwhile, the $100/ton plunge in HDPE yarn offers compared to early June is adding more salt into the open wound of the sluggish demand condition in the HDPE sector.