Asia Daily PP and PE Overview – 28 November 2018

CHINA

·       Indian homo-PP plunged to 16 months low

·       Domestic market picks up drastically on positive futures market

Polypropylene (PP)

Major Indian producer pioneers the drastic price cut in import homo-PP offers to China by concluding deals at $980/ton CFR term. This is the first time import homo-PP prices breach below the $1000/ton threshold since mid of July 2017. It is reported that more than 20,000 tons of the cargoes have been sold at this price level.

“We find the new offers very attractive. The domestic market is recovering from weeks of sliding and we managed to re-sell some quantity at $1030/ton with the same term,” a Chinese trader said.   

Polyethylene (PE)

Similar to the PP sector, sentiment in the PE market sees visible improvement as buyers become more enthusiastic to make fresh replenishment following the strong recovery in the futures trading. Transactions in the import ground also pick up, sources said, though buyers are not as aggressive as for PP.

“We managed to obtain some discounts for Saudi HDPE and LLDPE film cargoes. Would domestic market continue to improve in the near term, there would be some support for international suppliers to be firm on prices,” a buyer added.    

SOUTHEAST ASIA

·       Indian homo-PP concluded at large reduction in Vietnam

·       Import PE market remains sluggish as buyers press for more discounts

Polypropylene (PP)

Following the development in the near-by China market, Indian homo-PP reached deals at $1060-1070/ton in Vietnam while most other Middle Eastern suppliers remain committed to keep offers above the $1100/ton threshold.

Players here fear that prices might soon fall below the $1050/ton mark despite the fact that most Middle Eastern sellers have yet to agree to transactions below the $1100/ton threshold. “The deal for Indian cargoes is paving the way for the market to move lower. We are waiting for now,” a source said.

Polyethylene (PE)

The regional PE market is rather sluggish, as buyers prefer to take a cautious stance before suppliers agree to any major discount that potentially brings prices to a more attractive level. “We are offering Indian LLDPE film at $1000/ton CIF Vietnam and yet, respond is rather slow. Very few customers are willing to place bids,” an international trader reported.

In the meantime, regular Middle Eastern cargoes offered to Southeast Asia are ways higher than to China this week. In fact, no Middle Eastern maker conceded to deals for HDPE film below the $1100/ton threshold in Southeast Asia yet, while most of these cargoes have reached the $1000-1060/ton CFR China today.