Asia Daily PP and PE Overview 4 September 2018

CHINA

• Re-export homo-PP from Turkey emerged in China 
• Import PE market remains on the stable to softer track 

Polypropylene (PP)

There were slightly more than 1000 tons of Saudi homo-PP concluded in China at the price level $1200-1210/ton CFR, LC AS term. The eye-catching thing is that these cargoes were diverted from the Turkey market, where the currency crisis is hurting import businesses. 

“This a good brand name and prices are lower than direct offers from Saudi. We managed to procure some quantity,” a buyer reported. The source added, “This could be just the beginning. Demand in Turkey might need time to overcome the situation and if the government tighten monetary policy, it could become more difficult for businesses there.”

Polyethylene (PE)

New import PE to China continues to show up, mostly on the stable to softer levels. Thailand major keep HDPE film prices unchanged at $1360/ton and LLDPE film at $1200/ton CFR China. There have been reports that supply for LLDPE film from the maker is normalising, from which buyers are showing poor acceptance level for the latest offers. “In the meantime, Taiwanese HDPE cargoes are available at $35/ton lower. It is natural that we go to more competitive origin,” a buyer added.    

Saudi LLDPE film is offered at $1150/ton CFR China, however, deals are done at $20/ton discount. “We are not running at the high rate, yet still facing some inventories pressure due to the Turkey issues. At the moment, we have increased the allocation to China market,” a source from the producer informed.  

SOUTHEAST ASIA 

• Saudi maker continue to step back on PP, PE offers in Vietnam 
• Domestic Indonesia market encountered currency effect 

Polypropylene (PP)

Deals for Saudi homo-PP yarn concluded in Vietnam at $1250/ton CIF, LC AS term, a $10/ton reduction from the initial price list. Buyers, who were initially hoping to obtain the cargoes at below the $1250/ton threshold, have now decided to proceed with purchases. 

In Indonesia, major local producer introduced a $15/ton hike on all PP and PE offers following the depreciation of the Rupiah against the US dollar. Local buyers are rather concerned over the development fearing that the Indonesian Rupiah might depreciate further, which push local prices higher. “We are monitoring closely the demand condition for any sign of panic buying. At the moment, buyers still ask for old offer levels,” a trader said.  

Polyethylene (PE)

The regional HDPE film market appears to be slightly softer and buyers are caught with surprise when trader offer Kuwait HDPE film at $1270/ton CIF Vietnam, LC AS and last shipping date on 31 October. “Our customers decided to drop all bids after hearing about this offers. Regardless of the limited quantity available, buyers just use the lower prices as a negotiation point,” a trader collects bids for Middle Eastern cargoes at $1290-1300/ton said.

Meanwhile, USA LLDPE film offers to Indonesia see $20-30/ton increased from last week to $1130-1140/ton CIF term. Negotiation is strong, no doubt that the weakened local currency is making imports more expensive. A good point is that demand seems better. “This is because buyers with BMDTP scheme need to clear the import quota. Purchasing interest shall continue to improve as buyers need cargoes to arrive before the end of the year,” an international trader spoke in confidence.