Asia Daily PP and PE Overview 29 October 2018

CHINA

• Local and import offers for PP, PE continues to slide
• Near-term outlook remains bearish 

Polypropylene (PP)

China PP market extends the correction strike with overseas sellers continue offering discounts of another $10/ton week on week, sending the latest price list to $1210/ton for Indian origin and $1190/ton for South Korean origin, all based on CFR China, LC AS term. 

In the local ground, spot price list drops CNY50/ton ($7/ton) from last week and buyers are not showing a strong appetite for fresh buy yet. “We are still waiting on the sideline. Supply might soon improve in line with the arrival of the previous purchase cargoes,” a market source informed.

Polyethylene (PE)

Several overseas sellers race to cut import offers to China following the latest drop in the upstream market, while a couple of others prefer to maintain price list unchanged until receiving clearer respond from buyer’s side. “We purchased Qatari LLDPE film at $1080/ton and LDPE film at $1090/ton CFR China, LC 60 days term. Supply does not seem to be that tight anymore, and we expect a similar discount from other suppliers within this week,” a buyer added.  

SOUTHEAST ASIA 

• Limited market movement on the first trading day of the week 
• Continued falling upstream costs cast more concern in PP, PE market

Polypropylene (PP)

There are very limited new offers for import homo-PP on the first trading day of the week, however, with propylene costs returning to the level last seen during August 2018, regional buyers believed that market is now under more downward pressure.

“We hope to achieve some deals for Middle Eastern cargoes at below the $1250/ton mark this week. At the moment, we are waiting for new offers to emerge,” a regional buyer commented. 

Polyethylene (PE)

Sentiment in the Southeast Asian PE market is rather heavy. All eyes are now on the upstream ethylene market, which has not shown any sign of reaching the bottom after plunging to the lowest level since 31 July 2017. “It is too risky to make new purchases at the moment under the tremendous pressure from the ethylene market and the heavy arrival of lower costs USA cargoes. We are scaling down now to protect cash-flow,” a Vietnamese trader informed.

The situation is not brighter in local Indonesia market, where major suppliers have been cutting LLDPE film prices by large extent given the lengthy supply condition.