Asia Daily PP and PE Overview 3 October 2018

There are no trading activities in China this week due to the National Day holiday. Market will resume working on 8 October 2018.

SOUTHEAST ASIA 

• Overseas sellers hold firm on import homo-PP offers 
• Ethylene costs at fresh low in 2018, confident in PE market drops further

Polypropylene (PP)

After implementing some increases on import offers at the beginning of the week, most major overseas suppliers are holding firm on the prices. Besides the lack of inventories pressure and strong upstream costs, the shutdown at Saudi’s NATPET plant after a fire might provide additional support for the firming trend in the near term.

“We have not set final prices for Saudi homo-PP in Vietnam and our principal supplier has allocated half of the quantity to other markets. Looking at the current development, buyers with bids below the $1250/ton threshold might not get any quantity,” an international trader informed. 

In the meantime, Saudi homo-PP emerged in Indonesia at $1270-1280/ton CIF, LC AS and prices below the $1250/ton market have technically disappeared. Buyers remain reluctant in accepting the latest hike.

Polyethylene (PE)

Asian ethylene market plunged to the lowest level in 2018, reaching $1220/ton CFR Northeast Asia and $1120/ton CFR Southeast Asia. The fall hits buying sentiment in the downstream PE market further, which has been traded well below the theoretical costs for some time now. 

“Indonesian customers are retreating to the local ground to avoid currency risks, too. We used to sell better last week, but transactions are weaker now,” a Saudi Arabia maker said. 

Local Indonesian traders are seeing better demand for HDPE film but expressed the disappointment for other grades. Deals for HDPE film are materialized at IDR200,000/ton ($13/ton) higher, partially due to the exchange rate, “And customers fear that further hike is just the matter of time, hence prefer to source additional quantity now,” a trader informed.