Asia Daily PP and PE Overview 6 November 2018

CHINA

• Import regular homo-PP slipped below the $1200/ton threshold
• Traders become more active in forward selling PE cargoes 

Polypropylene (PP)

Traders open offers for Indian homo-PP yarn at $1190-1200/ton today, signaling the lack of confidence in the near term market outlook among sellers. Instead of attracting sufficient buying interest, the price cut generates little effect of the sales result, sources said.

In the meantime, most market actions are taking place in the local ground now that buyers are showing diminished interest in deep-sea cargoes. “We are feeling uncertain about the possible market trend in the first quarter of 2019. Supply does not seem to be an issue now, therefore, we prefer to slow down a little,” a converter said. 

Polyethylene (PE)

More traders are forward selling PE cargoes with anticipation that prices might see additional reduction in the weeks to come. Taiwanese HDPE film is available in the distribution market at $1220/ton CFR China, LC AS, which is $25/ton below the producer’s official price list. 

“In the meantime, we are placing bids for Indian LLDPE film at $1000/ton CFR China. We hope to achieve deals at this level before proceeding with any additional buy,” a buyer said.

The increase in export tariff return might have more impact on the PE sector than PP, sources said. In fact, PE end products enjoy an increased of 3% of the tariffs return while BOPP sheet on see 1% increased.    

SOUTHEAST ASIA 

• Limited market movement as players remain on the sideline 
• Regional players expect more USA cargoes in the near term

Polypropylene (PP)

There is no absurd movement in the regional PP market with only a few suppliers maintaining prices unchanged week-on-week. Regional buyers remain on the wait and see position, hoping to see some downward adjustments as a result of the continued correcting trend in the nearby China market.

“Saudi homo-PP cargoes are still at the $1240/ton CIF Vietnam this week. We expect lower prices in the coming days,” a Vietnamese woven bag maker informed. 

Polyethylene (PE)

There have been reports that inventories at major USA producers’ warehouses are piling up, which leads to the strong expectation that more of cargoes from this origin might show up in Asia in the near to medium term. Bids for prime grade USA’s LLDPE film emerge in Vietnam at as low as $1020-1030/ton this week, though no actual deals have been achieved at such low levels.

The pro-longed Rhine river draught issue in Europe has not shown major impact on end product businesses in Southeast Asia. CommoPlast discussed with a number of export-oriented converters in the region and so far no report on delays or issues with shipment going to this region. “Orders from France customers are still regular. The issue might impact raw material more than the end product,” a PE packaging converter said. 

Market is speculating that cargoes that were initially meant for the Europe market that now cannot be delivered through the river, might find its ways to Asia.