Asia Daily PP and PE Overview 27 August 2018

CHINA

• Plunging futures market continue slowing down spot demand 
• Indian PE cargoes emerged after two weeks of absence

Polypropylene (PP)

Futures market recorded a small gain by the end of the trading session, however, remains at multi-weeks low levels. Demand in the domestic ground is further dampened, as it was not that satisfactory during the high time on Dalian Commodity Exchange.

“We are offering up to CNY150/ton ($22/ton) discount to smoothen the sluggish sales process. Demand is not strong even though the school opening day should have generated some activities. At the moment, the market is supported by the tight supply condition,” a market source said.  

Polyethylene (PE)

Two major Indian PE makers resumed offering PE cargoes to China at the price levels that are little changes from two weeks ago. The LLDPE film ranges $1090-1120/ton while HDPE yarn is at $1240/ton, CFR China, LC 0-90 days term.

Buyers are not responding strongly to the latest offers, sources said, as regular Saudi Arabia cargoes are available at $1120/ton LC 90 days term and creating a major distraction among players. “Futures market is weaker this week and therefore, our customers are slowing down in anticipation of further discount in the near term,” a trader commented.

SOUTHEAST ASIA

• Regional PP market remains quiet due to lack of new offers 
• More suppliers announced September shipment offers for PE 

Polypropylene (PP)

The regional PP market is rather quiet on the first trading day of the week due to the lack of new offers available. Players are on the wait and see, though the prevailing expectation is that prices might only hold the stable position, as demand is not supporting any hike.

“We are monitoring closely the state of demand in the near-by China market as well as in Turkey. The concern is that market might not be able to firm up would these two markets remains sluggish in the near term,” a regional buyer commented. 

Polyethylene (PE)

More international suppliers open new offers for September shipment PE cargoes to Southeast Asia market, though at a mixed direction. A major Saudi Arabia producer decided to lift LLDPE film prices to Vietnam by $10/ton from last month to $1160-1170/ton, yet slashed offers to Indonesia by $20/ton to $1130-1140/ton, CIF, LC AS term.

“This is very strange, and therefore, we place bids at only $1140/ton for LLDPE film and $1300/ton for HDPE film,” a Vietnamese buyer commented. 

Buying interest in Vietnam for near-prime and off-spec LLDPE film cargoes originated from the USA remains healthy. Sources informed that the lack of recycled material in the local ground is boosting demand for these cargoes and active deals have been reached at $1040-1050/ton CIF, LC AS.