Asia Daily PP and PE Overview 18 September 2018

CHINA

• Local market sees better transactions as pre-holiday replenishment kick-off
• Purchasing interest for Asian cargoes improved significantly 

Polypropylene (PP)

Total inventories on Sinopec and CNPC hands reportedly fell 45,000 tons day-on-day to approximately 710,000 tons as on 18 September 2018. The positive Dalian Commodity Exchange coupled with tight local supply boosted spot prices by as much as CNY200/ton ($29/ton). Sources believed that the pre-holiday replenishment activities are now starting. 

Competitive Vietnamese homo-PP cargoes are catching attention in China, though the previous price level at $1240/ton CFR China is no longer available. New offers emerged at $15/ton higher and yet, the supplier claimed healthy sales results.

Polyethylene (PE)

Taiwanese major reportedly sold out HDPE film cargoes to China at the price level $1290-1300/ton CFR, LC 0-90 days. In the meantime, Thailand producer slashed HDPE film offers by $15/ton week on week, sending the latest price list to $1340/ton, CFR China, LC AS term.

“Supply for this grade is not ample in local ground, and we decided to procure 1000 tons at $1330/ton with the same term,” a trader reported. Other buyers are seeking lower price levels. 

SOUTHEAST ASIA 

• Saudi homo-PP softened in Vietnam
• Overseas sellers indicated softer October PE offers

Polypropylene (PP)

A major Saudi Arabia maker agreed to $20/ton discount on import homo-PP cargoes to Vietnam, sending the final price list to $1240/ton for yarn and $1230/ton for injection grade, all based on CIF Vietnam, LC AS term. This is much inline with market expectation, yet buyers are not showing the eager in making larger purchases. 

Meanwhile, local Indonesia started seeing improved availability thanks to the arrivals of previously purchased cargoes from the import market. Traders are showing slightly softer stance with locally produced cargoes emerge at $1330/ton without VAT, FD Indonesia, cash term. “We could negotiate, however, it is better to wait for a while since supply is normalizing,” a buyer said. 

Polyethylene (PE) 

Market is waiting for Middle Eastern producers to announce new prices for October shipment. Couple of makers have indicated softer offers citing the intense competition from USA materials. “We have not decided on the new offers, however supply is increasing ahead of the year-end season, which means we have to be more flexible,” a producer said. 

Southeast Asian buyers are discussing a possibility that import HDPE film might return to the similar levels with the mainstream LLDPE film at the moment. There is no fundamental support for the large price gap between HDPE and LLDPE like it is at the moment, players said.