Asia Daily PP PE Report 14 Apr 2016

In China, futures prices on Dalian Commodity Exchange extended the weakening trend with contract number 1609 for PP tumbled CNY134/t ($21/t) to CNY6823/t ($900/t without VAT) while LLDPE futures fell CNY90/t ($14/t) to settle at CNY8300/t ($1095/t without VAT).   

Domestic spot market continues to be dragged down by weaker futures market and sluggish buying interest. Traders issued another CNY50-100/t ($8-15/t) reduction on PP and PE prices compared to yesterday with hope to speed up sales ahead of ChinaPlast exhibition. 

A yarn converter in Fujian received local homo-PP offer at CNY7000/t ($925/t excluding VAT) EXW China said, “We consider this to be a very sensitive level for traders and they might attempt to maintain prices in the coming week. We are supposedly embracing peak seasonal demand for woven bag from March-May period, yet order for our end product is rather disappointing. June is considered as off-peak season for us, hence we think market might turn south next month.”

The import market has also witnessed some slight reductions as traders are attempting to stimulate demand. A trader offering Indian homo-PP at $1000/t CFR China for Jun delivery, some $40/t below the official price list said, “Buyers are just not confident in making purchases resulted in strong resistance toward the upper range of the overall market level. We couldn’t achieved satisfactory sales in domestic market today and near term outlook is really cloudy to us.”

Another trader from Shanghai added, “We are able to conclude some deals for HDPE film this week after agreed to some discounts. Besides, we have reduced prices for Middle East LDPE film by $10/t to $1190/t CFR China TT basis today. Demand is not there and we think import market might gradually go down in the coming days.”

In Southeast Asia, market is now on the tug of war between strong buyer resistance and the apparent tight regional supply. However, sellers seem not in hurry to give any large discount, especially for PP with expectation that limited cargoes would prevent the market from any possible rapid reduction. A trader received homo-PP offers from various origins at $1110/t for Indian cargoes, $1070/t for Middle East cargoes and $1050/t for Chinese coal based cargoes, all based on CIF Vietnam LC AS term said, “We think the market would remain quiet till end of the month since Vietnamese buyers are on holidays till early next week while Thailand and Cambodia are on Songkran festival. Local market is under a lot of downward pressure therefore we are not planning to replenish material at the moment.”

In the PE market, more re-export cargoes from China are being offered to S. Asia market which becomes a constant pinch in the regional buyer’s mind about the state of demand in the region’s biggest market. A trader from Yuyao, China offered re-export Iranian HDPE film at $1190-1200/t CIF S. Asia said, “Our cargoes just arrived and local demand is not supportive. We are opening to negotiation if S. Asia customers have enquiries. We think PE might find it difficult to go up further given lack of buying interest and expected weaker upstream cost in the coming month.”

Meanwhile, players in Malaysia are struggling with the lack of LLDPE film supply in domestic spot market, which push prices to MYR5500-5600/ton ($1375-1400/ton) FD Malaysia, excluding VAT. A converter in the country added, “Most sellers are trying to adjust their offer up further, however we have already replenished sufficient inventory and not in hurry to make fresh purchases. We think the market might be softer by mid of the year in line with the fasting month, hence we are basically on the sideline to wait and see now.”

For detail Daily Prices in China and Southeast Asia market, kindly visit our website at www.commoplast.com. Please contact our representatives at commoplastinfo@gmail.com for log in assistance.