Asia Daily PP and PE Overview 9 October 2018

CHINA

• Demand remains healthy; concern over the skyrocketing PP prices get stronger 
• Import PE market inches slightly higher

Polypropylene (PP)

The PP market remains active on the second trading day of the week and despite the constantly firming in offers, buyers continue sourcing additional stock for immediate production need. In just two trading days, domestic homo-PP prices have increased about CNY400-500/ton ($58-72/ton) compared to the pre-holiday period and buyers started showing a more cautious stance. 

“Market rises too strongly and too quickly. We have some cargoes arriving by the second half of the month and at the moment, we only buy minimal quantity to avoid the risk of a price correction,” a buyer said. 

Polyethylene (PE)

Several overseas makers implemented $10/ton increased on import PE cargoes to China, including Thailand, India and Qatari materials regardless of the plunging upstream ethylene costs. Real transactions have been materialized, however, PE customers are not as aggressive as PP.

Looking ahead, players expect the import market to retain the stable to slightly firmer levels if domestic ground continues to strengthen. Demand shall gradually pick up given the peak season from the packaging and the agricultural film sector, sources said, and therefore, the impact of the plunging ethylene costs might be mitigated to a certain extent.  

SOUTHEAST ASIA 

• Import homo-PP tightened as overseas seller divert cargoes to China 
• Limited PE offers available at stable levels 

Polypropylene (PP)

Several major producers claimed having either sold out October allocation or carried very small remaining quantity at the moment as a result of heavy leverage on the healthy demand in the nearby China market. 

Vietnamese buyers, who were pressing for prices below the $1250/ton threshold for Saudi yarn cargoes have now lifted the bid to $1250/ton in an expectation that market might have bottomed out. “We are waiting for the supplier to revert on the quantity. We refrain from too large purchases as the skyrocketing PP market in China might soon face correction, which could affect the sentiment in the Southeast Asia region, too,” a woven bag maker commented.    

Polyethylene (PE)

The regional PE market remains pretty calm and there are only a few offers available at mostly stable to firmer levels compared to last week. Import offers for USA LLDPE film show up in Indonesia with $20/ton hike to $1120-1140/ton CIF Indonesia, LC AS term.

In the meantime, import HDPE film also sees $5-10/ton increased week on week to $1270/ton for Middle Eastern cargoes to Vietnam. “However, we are still facing tremendous difficulties in attracting deals among buyers in the Southern Vietnam market while Northern buyers started becoming more active in placing bids,” an international trade informed.