Asia Daily PP and PE Overview 13 September 2018

CHINA

• Trading activities hold steady in local ground 
• US-China trade talks do not enthuse Chinese players much 

Polypropylene (PP)

Trade movement in domestic ground remains relatively steady just that the much-awaited pre-holiday replenishment activities are not happening as soon as sellers were expecting. Such condition is stirring speculation among traders that there might be ‘last minutes’ purchases, and therefore, tend to hold firm on the offers. “Anyway, supply is not ample, especially for homo-PP yarn,” another source added.    

Polyethylene (PE)

Similar to the PP sector, PE buyers are mostly waiting for additional discount before proceed with larger purchases. Agricultural film manufacturers in Northern China areas are mostly operating at about 60% capacity and the recent flood has hampered end product demand to a certain extent. “Therefore, we prefer to wait a little longer. Local suppliers might face pressure to deplete cargoes before the long holidays in October,” a converter said.

In a separate development, Chinese players are not very optimistic about the USA-China trade talks that aimed to revert the full-blown trade war between the two countries. That is why; buyers here are not having the interest to deal with USA cargoes still, and if there is interest, most are from re-exporters.  

SOUTHEAST ASIA 

• US materials continue stealing the spotlight 
• Tighter supply pushes local market in Indonesia higher 

Polypropylene (PP)

Exchange rate and tighter availability in the local ground has encouraged suppliers in Indonesia to pull up the lower end of the overall price range for homo-PP by $20/ton from earlier this week despite the growing resistance among buyers. “Demand for woven bag is there, just that we are unable to transfer the high raw material costs to end products, leading to squeezed margins. We would buy again when the supplier agrees to discount,” a manufacturer said.

In Vietnam, converters are astonished by an offer for duty-free homo-PP yarn originated from Thailand at $1260/ton CIF, LC AS. “Our supplier does not usually give such competitive price level. We plan to ask for $10/ton discount to take in larger quantity this time,” a woven bag maker said. 

Polyethylene (PE)

Import PE cargoes from the USA continue to show predominance in Vietnam market with LLDPE film cargoes prime grade ranging $1080-1120/ton CIF, LC 0-90 days term. “We are placing bids at $1060/ton for prime LLDPE film and currently waiting for the feedback. However, there is a high chance to achieve deal. We are also looking at some off-grade cargoes at the moment,” a converter said. 

Most Middle Eastern have settled businesses for September and currently waiting to announce October shipment prices. Players are expecting new offers to follow stable to softer trend considering the tremendous pressure that USA materials bring.