Asia Daily PP and PE Overview 5 November 2018

CHINA

• PP market regains some strength but outlook remains cloudy 
• Import PE is moving closer to the $1000/ton mark 

Polypropylene (PP)

The lower end of last week’s offers for Indian homo-PP at $1200/ton CFR China LC 90 days term has not repeated on the first trading day of the week. However, sentiment in local ground brightens a little in line with the recovery on Dalian Commodity Exchange. 

“We are sourcing material mostly on the hand-to-mouth basis for now. More of our cargoes would arrive in the coming weeks. Lunar New Year this time is earlier than usual, leaving the market shorter time to deplete inventories. Market would start to slow down by the second half of January,” a PP container maker reported while adding regular demand for the end product.   

Polyethylene (PE)

Traders are forward-selling Indian LLDPE and LDPE film cargoes at $1030/ton CFR China, while Qatari HDPE film has reached $1200/ton with the same term. Sources fear that import LLDPE and LDPE film would breach below the $1000/ton mark given the current upstream costs condition.  

SOUTHEAST ASIA 

• Import PP, PE market open on stable to softer notes 
• Weak upstream costs scared buyers from large replenishment 

Polypropylene (PP)

Few suppliers open new PP offers to the region on the first trading day of the week, however, the market is carrying a widespread expectation for further price reductions in the near-term. Propylene costs based on FOB South Korean fell to the lowest levels since early April 2018 thanks to improving supply condition.

“We placed bids for Thailand homo-PP yarn cargoes at $20/ton below initial price list and currently waiting for feedback. Other suppliers have also cut prices since late last week, hence we prefer to be cautious,” Vietnamese buyer received Thailand PP offers at $1265/ton CIF, said.

Polyethylene (PE)

Special deals for Saudi LLDPE film reported late last week at $1080/ton CIF Vietnam, TT in advance term apparently attract little attention. Upstream ethylene costs have shredded $285/ton since 2 October to $835/ton CFR Southeast Asia on 2 November. With import LLDPE and LDPE film offers to China draw nearer to the $1000/ton mark, Southeast Asian buyers just become shier to make new purchases.

“We prefer to wait and see for now. Market is on the roller coaster and it is better to be conservative,” a regional buyer commented.