Asia Daily PP PE Report 18 Apr 2016

In China, futures prices on Dalian Commodity Exchange posted smaller loses with contract 1609 for PP dipped only CNY60/t ($9/t) to reach CNY6798/t ($897/t without VAT). LLDPE futures have also settled at CNY55/t ($8/t) decreased at CNY8335/t ($1099/t without VAT).

Physical spot offers for both PP and PE in domestic market extended the weakening trend, which has been in place since last week. Producer’s price lists represent some CNY50-150/t ($8-23/t) lower for PP cargoes and CNY50-100/t ($8-15/t) decreased on PE parcels, yet traders are reporting strong willingness to negotiate further with serious buyers.

A converter in Fujian commented, “Softer prices have made domestic PP cargoes more attractive now, however we are still having sufficient inventory from which we are not in rush to make additional purchases in the near term. Demand for our end product is not that encouraging and we are hearing same situation from other converters. We think prices hold very small chance to rebound in the coming days.”

In the import market, some sellers have elected to lower their offers in the face of persistent weak buying interest. A major Indian maker opens new offers at $30-40/t lower than last week to reach $1000-1010/t CFR China, LC 30 days term. Meanwhile, a trader offers Russian and Saudi Arabia homo-PP at $990/t CFR China, LC 90 days said, “Even prices have breached below the $1000/t threshold, we received very few purchase enquiries from regular buyers. Weakening futures prices have pulling along the domestic market, therefore we feel import cargoes are really under pressure.”

Some offers for Brazilian HDPE blow moulding have also emerged at $10-20/t reduction from last week while a Thai producer maintains very firm stance on their cargoes claiming limited supply stemming from the recent shutdown.  

In Southeast Asia, market sentiment was reported to be pretty quiet on the first trading day of the week, and most players are now waiting to see the impact of falling energy market on the polymer prices. In the PP market, a major Indian producer elected to cut their prices by $25/ton in the latest offer compared to last week to reach $1085/t CIF Vietnam, LC AS term. Most players in Vietnam are still on holiday, therefore little respond was observed. A market source added, "We think that the downward adjustment is mostly driven by energy market. We might see more activities in Vietnam tomorrow, yet we do expect local prices to move down quicker than import market given the sluggish demand from woven bag makers and comfortable on hand stock from trader side."  

Most regional players are not expecting any significant downturn in term of homo-PP prices given strong support from supply tightness. A regional producer commented, “There might be some discount on deals, but no rapid price erosion is expected. We will only have export allocation in June.”

The PE market has not seen many fresh offers today with some prices emerged at unchanged levels from last week. A Malaysian producer maintain LDPE film offers at $1300-1310/t CIF Vietnam, LC AS term said, “Demand is rather disappointed and we are waiting to see further development before decide further on our cargoes. There are some sellers offering at very competitive levels and this might give buyers more negotiation power in the coming days. We are not having large quantity in hand.”

In Indonesia, a major local producer has lifted domestic LLDPE film offers by approximate $8/ton compared to last week while stepping back on HDPE film offer by $10/t. A trader in the country commented, “Demand is very weak at the moment and even our international supplier has indicated some small reduction in the next opening. We are holding wait and see stance now as near term outlook remains cloudy.”

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