Asia Daily PP and PE Overview 25 October 2018

CHINA

• Mediocre trading activities as buyers await more discounts for PP 
• The downtrend in import PE market continues to deepen 

Polypropylene (PP)

South Korean’s S-Oil homo-PP cargoes continue to show in China market in the form of blank packaging at $1200/ton CFR China, LC AS term. Sources fear that import homo-PP to China might slip below the $1200/ton threshold in the near term if the softness in local ground persists. 

“That’s why we have been extra cautious when it comes to imported cargoes this week. The Chinese Yuan is going to depreciate further against the US dollar. We do not have strong risk appetite now,” a trader said.   

Polyethylene (PE)

Taiwanese HDPE film dives another $30/ton from the beginning of the week to $1280/ton CFR China, LC AS while Indian LLDPE film is available in the price range $1070-1080/ton with the same term. Today’s market is rather heavy with sources expecting more price cuts to come by the beginning of November considering the current ethylene costs.

SOUTHEAST ASIA 

• More overseas producers cuts PE offers to Southeast Asia 
• Import PP market mixed; higher prices face stiff resistance 

Polypropylene (PP)

It is a mixed Thursday for the Southeast Asian import homo-PP market. Two major Middle Eastern producers announced November shipment offers with $10-20/ton hike month to month to $1260-1280/ton CIF Southeast Asia, LC AS term, while there are still deals for Saudi Arabia and Indian cargoes at discounts to $1250/ton with the same term.

Southeast Asian buyers seem embedded with the expectation that the PP market is not having ample room for increment, instead, slower demand and weak upstream costs are downplaying suppliers’ effort in even keeping the market stable. 

Polyethylene (PE)

More overseas sellers announced new PE offers to the region mostly at lower levels month on month, which is a result of plunging ethylene costs and increased supply condition. Buyers in Indonesia are expressing the acceptance levels for dutiable LLDE film cargoes at below the $1100/ton mark, though no actual deals have been recorded. Meanwhile, local traders in Indonesia continue slashing domestic LLDPE film prices in light of the heavy arrival of the previously purchased Indian and USA cargoes. 

On the other notes, major Indian producers might re-open offers for PE to Southeast Asia soon following the completion of Diwali preparation in the domestic market here. “November would be a short month in India, and therefore, we plan to be more aggressive in the export market,” a producer informed.