Asia Daily PP and PE Overview 16 August 2018

CHINA

• Better number of import homo-PP offers emerges in China 
• Demand from agriculture film sector remains steady 

Polypropylene (PP)

There is a better number of import offers for homo-PP emerge in China toward the end of the week. More Middle Eastern materials are available in the price range $1240-1250/ton CFR China, which players are questioning if these cargoes are being diverted from Turkey market. 

In the meantime, materials from newly started up plants in Southeast Asia continue to present at the level $1250-1260/ton CFR China for both yarn and injection grades. “More suppliers pay attention to China this week and if this condition persists, the PP market might face difficulties to firm up,” a market source commented.

Polyethylene (PE)

Demand for PE from the agricultural film sector remains steady, local trader informed, which support domestic prices amid weakening futures market. Inventories digestion rate in Northern China areas is healthy while stocks keep pilling up in Eastern and Southern market. 

“There has been bumper to bumper over the past weeks and we have to offers discounts to smoothen sales process, however, we remain optimistic about the near-term outlook,” a trader informed. 

SOUTHEAST ASIA 

• Limited movement in the regional PP, PE market
• Import PP outlook turns uncertain on potential softer demand across the region

Polypropylene (PP)

A major Saudi Arabia producer announced homo-PP yarn offers to Vietnam and Indonesia at $1260/ton CIF, LC AS and deals have been achieved at a minor discount. “However, buyers are no longer eager as they were previously. Fear over a potential slow down in demand across major markets in the world is clouding the near-term outlook,” an international trader commented.

Besides the record depreciation of the Turkish Lira that impairs demand for imports, the Indonesian government is planning to curtail the import of capital and consumers goods that were believed to worsen the country’s current account deficit. Players are mostly on the wait and see mode.    

Polyethylene (PE)

Import PE market remains calm toward the end of the week. There might not be many offers from Middle Eastern suppliers in the coming days given the Eid al-Adha holiday. The strong ethylene costs are supporting the sentiment in the downstream PE market and suppliers are hoping to maintain the firm stance for September shipment offers.