Asia Daily PP and PE Overview 11 October 2018

CHINA

• Demand softens slightly as buyers stocked up sufficiently 
• Import market remains on the stable to firmer track; sentiment looks calmer

Polypropylene (PP)

Purchasing interest in both local and import ground started to show the inertia following the drastic hike in offers over the past days. Partially due to the fact that buyers have already stocked up comfortable inventories needed for the production and fear that there might be a minor correction soon.

“Interest for import dutiable homo-PP cargoes drops visibly once prices reach the $1280/ton mark. We are not having any quantity now, and would there be a factor to support the current firming trend in the coming week, it might only be the supply factor,” an international trader commented.     

Polyethylene (PE)

The PE market remains pretty steady, as it has been over the past several trading sessions. Local suppliers are offering discount of CNY50-100/ton ($7-14/ton) on deals following the softness in the futures market, yet buyers are a bit slack in responding to the incentive. 

“We purchased some quantity of Saudi LDPE film at $1130/ton CFR China, LC 30 days term after obtaining some discounts from the initial price list. Demand for our end product is stable, the thing is that customers are no longer placing long-term contract orders like they used to, instead, month-on-month basis. And therefore, we also need to re-planning our purchasing activities,” a flexible packaging converter said. 

SOUTHEAST ASIA 

• Overseas sellers suspended offering to Southeast Asia 
• Import HDPE film to Vietnam faces resistance while Indonesia might see increases 

Polypropylene (PP)

Major Indian producer open new homo-PP offers to Vietnam at $1265/ton CIF, LC AS term, however, withdrew the list almost immediately, claiming out of allocation. Meanwhile, a Saudi Arabia maker offered at $1270/ton to Vietnam this week has also suspended the validity after achieving healthy sales results in the nearby China market. 

“Very few suppliers actually open new price list this week. The import market is very quiet and there is a high probability that market would be firmer in the coming week,” an Indonesian buyer reported.  

Polyethylene (PE)

Several suppliers, whose offers for HDPE film to Vietnam stand at $1270-1280/ton CIF, LC AS term are complaining about the persistent difficulties in attracting deals despite the willingness to lower prices. Buyers here are just too concern over the weak upstream costs and the unfavorable international trade condition.

“We are inviting bids for Kuwait HDPE film at $1260/ton and so far, no customers show interest. Would this condition persist in the coming week, we fear that further reduction might become inevitable,” an international trader offering the cargoes at $1280/ton CIF Vietnam said. 

Meanwhile, couple of suppliers claimed to have sold out allocation to Indonesia market and expressed the intention to implement some increases in the coming week.