Asia Daily PP and PE Overview 15 October 2018

CHINA

• Sentiment slows down visibly in both local and import ground
• USA HDPE injection emerge at below the $1000/ton threshold 

Polypropylene (PP)

Import offer for Indian and Saudi homo-PP cargoes are available at $1280/ton CFR China, LC AS term and resistance is rather stiff. Purchasing interest has dropped visibly and sources claim that acceptance levels for dutiable homo-PP cargoes remain at the range $1250-1260/ton at the moment.

“Customers seem to have completed replenishment and might remain on the sideline in the coming days. We are open to negotiation, yet respond is not very great,” a trader said.

Polyethylene (PE)

It appears that suppliers for USA HDPE injection are facing tremendous pressure amid ample supply for this grade. These cargoes emerge in China market today at $930/ton CFR China, LC 90 days term and bids are coming in at as low as $880/ton with the same term. In the presence of the 25% import duties on this origin, sources said that export-oriented converters might be interested in purchases.

Meanwhile, buyers are waiting for new offers from overseas sellers with the expectation that the market might bias toward the downtrend given the weak upstream costs.

SOUTHEAST ASIA 

• PE market faces pressure as ethylene extended loses
• Import homo-PP stable to firmer with limited buying interest 

Polypropylene (PP)

Major Indian and Saudi Arabia makers maintain import homo-PP offers unchanged from last week to Vietnam at $1260/ton CIF, LC AS term and it does seem that buyers started to accept the firming trend. “We think the market could remain on the firming trend until November given the tightening supply condition. We have comfortable stock until mid of December and we are waiting for the next down-cycle to make new replenishment,” a household product converter said.

In the meantime, bids below the $1250/ton CIF find it difficult to be accepted by sellers. The upward pressure is rather strong looking at the upstream propylene costs and the supply condition, sources said. 

Polyethylene (PE)

Regional PE market is now waiting for new offers from overseas sellers. In contrast to the PP market, Southeast Asian buyers are not very confident in the PE sector now that ethylene costs are at the lowest levels in 14 months.

“The market is not healthy. The continuous appreciation of the US dollars also affects demand for import materials to a certain extent. Meanwhile, our BMDTP scheme has come to an end and therefore, we prefer to curtail purchases for deep-seas cargoes to avoid long lead time risk,” an Indonesian buyer added.