Asia Daily PP and PE Overview 26 July 2018

CHINA

• Despite strong claim of lacking pressure, import PE deals are seeing discount 
• Local market remains lukewarm 

Polypropylene (PP)

Import homo-PP from major Saudi Arabia and Indian producer emerged at $1200/ton CFR China, LC 0-90 days term with limited transactions observed. Players were hoping to achieve deals at below the $1200/ton threshold fearing of making loses on currency exchange.

Meanwhile, demand in the domestic spot market sees little movement following the weakness in futures trading. “We have to maintain prices as most cargoes on-hand at the moment were purchased at higher costs. The depreciation of the Chinese Yuan might not end yet and we need to protect the bottom line,” a trader said.  

Polyethylene (PE)

Despite strong claimed of freeing from inventories pressure, deals for Thailand and Taiwanese HDPE cargoes are done at $10-20/ton lower than initial price list. The sentiment is rather lukewarm on the back of currency exchange concern. 

In a bright side, the bloated LDPE film supply in the local ground seems to have reduced thanks to better replenishment activities amongst agricultural film manufacturers in Northern China area. The market therefore, might start regaining some balance in the near term.   

SOUTHEAST ASIA 

• Import HDPE film to Indonesia slipped below $1300/ton threshold 
• Buyers expect further discount on import homo-PP

Polypropylene (PP)

With non-dutiable homo-PP cargoes from Thailand concluded at $1255/ton CIF Vietnam, LC AS term, players continue putting more pressure on deep-seas Middle Eastern and Indian material, who has been really reluctant to cut offers. 

“We achieved deals for Saudi Arabia homo-PP injection at $1220/ton CIF Vietnam this week and it does look like the market is moving closer to the $1200/ton mark,” a buyer reported, adding that Saudi maker refused to give discount on yarn cargoes. 

Polyethylene (PE)

Import HDPE film originated from India and the USA fell below the $1300/ton threshold in Indonesia to $1270-1280/ton and $1290/ton respectively, all based on CIF, LC AS. “As a result, many customers are placing bids at similar price levels for our cargoes,” a UAE based producer said. “We have not decided on the final price to monitor further movement. Supply is smooth at our side,” the source added.

The development is putting pressure not only on the domestic spot market in Indonesia, but also on the regional import market. Many buyers are now adopting the wait and see stance with a strong belief that there is still room for HDPE market to inch lower.