Asia Daily PP and PE Overview 16 October 2018

CHINA

• Continued falling futures market hurts sentiment in spot ground 
• Import homo-PP inched lower but there are still deals 

Polypropylene (PP)

Offers for import homo-PP for origins including Vietnam, India and Saudi Arabia endure $10-20/ton reduction week on week as suppliers are coping with the slower sentiment here. However, the reduction in prices can still attract deals with the lowest transaction for Indian cargoes is reported at $1240/ton, and at $1250/ton for Saudi Arabia material, all based on CFR China, LC AS.

In the domestic ground, spot homo-PP have lost an accumulated CNY100-150/ton ($14-22/ton) from last Friday and potentially see more reductions in the coming days if the futures market extended the softening trend.  

Polyethylene (PE)

There have been reports that large-scale converters in the flexible packaging sector are rushing up orders for USA customers to be shipped out by the first half of November in order to avoid the additional 15% tariff by the beginning of January next year. Demand is there, but not strong, players said, while adding that the fall in ethylene costs are dragging the market confidence lower.

SOUTHEAST ASIA 

• Regional HDPE film market remains on stable to softer trend 
• Import homo-PP market sees discount at the upper end, others hold firm 

Polypropylene (PP)

Overseas sellers whose offers for import homo-PP stood at the upper end of the overall price range in the previous week started to down adjusted the offers following the slow down in the nearby China market. In particular, Vietnamese homo-PP witness $30/ton reduction to $1300/ton CIF Indonesia, LC AS term. 

Meanwhile, Middle Eastern sellers are rather quiet due to the lack of inventories pressure though offers for this origin remain in the range $1250-1290/ton CIF Southeast Asia, LC AS. “We do not expect any large price adjustment following the aggressive post-holiday replenishment in the nearby China market. Supply is rather tight and in addition to the strong upstream costs, the upward pressure is strong,” a Vietnamese converter added.  

Polyethylene (PE)

The regional HDPE film market continues to juggle the downtrend with Thailand HDPE film emerged at $1255-1260/ton CIF Vietnam, which is lower than many Middle Eastern cargoes. “We have not been able to collect any firm bid. Buyers are very reluctant regardless of the regular end product demand,” a Thailand maker informed.

Meanwhile, Vietnamese buyers reported having purchased HDPE film from another Thailand producer at $1230/ton with the same term. “This price is for large quantity. Local market is not so good and the general expectation is that import HDPE film should go down further, hence buyers tend to be cautious,” a local trader said.