Asia Daily PP and PE Overview 19 November 2018

CHINA

• Local homo-PP slips below the CNY10,000/ton mark 
• Import PE market remains on the stable to softer trend 

Polypropylene (PP)

Domestic spot homo-PP slips below the CNY10,000/ton mark for the first time in weeks as a result of falling upstream costs and weak Dalian Commodity Exchange. Local traders continue to offer small discount of CNY50/ton ($7/ton) discount and yet, sales results are below expectation.

Customers are mostly on the wait-and-see mode with expectation that strong arrival of import materials in the coming weeks might pressure local ground further. 

Polyethylene (PE)

Qatari LDPE film sees $25/ton reduction from last week to $1030/ton CFR China, LC AS while Indian suppliers attempt to hold firm on the LLDPE film offers, refusing to go below the $1000/ton mark. “We are still waiting. The strengthening in ethylene costs might not provide sufficient support to the PE sector,” a buyer said.

In the meantime, South Korean producers prefer to sell HDPE film in China given the higher acceptance levels, “However, we are channeling LLDPE film cargoes to Southeast Asia for better margins. Chinese buyers are bidding too low for this grade,” a producer said.

SOUTHEAST ASIA 

• Regional buyers await fresh offers from overseas suppliers 
• Surging ethylene costs show no immediate effect on PE market 

Polypropylene (PP)

There are very limited new offers on the first trading day of the week, though the continued weakening upstream propylene costs stress the downstream PP market further. Compared to the beginning of November, propylene based on FOB South Korea plunged $140/ton to $900/ton as on 16 November 2018, the lowest level in 11 months.

Regional buyers show no rush to make any fresh buy at the moment and prefer to wait for deep-sea homo-PP to breach below the $1150/ton threshold. 

Polyethylene (PE)

Southeast Asian PE sector is waiting for major overseas producers to announce December shipment offers. In spite of the escalated ethylene costs, most expectations are calling for lower PE prices month-on-month. This is because supply for PE seems lengthy with the widely available of USA materials, especially near-prime and off-spec cargoes.

In Vietnam, prime grade LLDPE film originated from the USA remains in the range $1000-1050/ton CIF Vietnam, LC 0-90 days term. “In the meantime, sellers are collecting bids for other origins. We are hoping to achieve deals for Southeast Asian HDPE film at below the $1150/ton threshold this week,” a Vietnamese converter said.