Asia Daily PP and PE Overview – 3 December 2018

CHINA

·      Trading activities pick up significantly 

·      Import PE market remains calm while homo-PP prices firm up 

Polypropylene (PP)

The futures market surges more than 3 percent on the positive outcome of the trade meeting between China and the USA, from which both countries agreed to cease-fire for 90 days in the ongoing trade war. Transaction in the local ground is marvelous, traders said. 

Meanwhile, Vietnamese homo-PP sold at $1100-1120/ton in the early morning session before lifting to $1140/ton CFR China in the afternoon. “Prices nearing or below the $1000/ton threshold have not repeated on the first trading day of the week. With the general sentiment becomes more positive, we think it is time for the market to rebound,” a source added.     

Polyethylene (PE)

In contrast to the PP sector, the PE market is calmer and in spite of the falling in ethylene costs, suppliers maintain a rather firm stance on the latest prices claiming reduced sales pressure. “We have sold about 6000 tons of HDPE to China last week and current in no rush to make adjustment,” a Taiwanese maker reported. 

Now that the price gap between HDPE and LLDPE film is narrower, it seems that Chinese buyers are gradually taking position instead of just wait and see.   

SOUTHEAST ASIA

·      Eased trade tension spills positive sentiment 

·      Production issues in Thailand LDPE plant attract re-export cargoes 

Polypropylene (PP)

There are very limited new offers for import homo-PP to the region on the first trading day of the week. However, it becomes clear that the sentiment is brighter following the truce between China and the USA in the latest trade talk. Apparently, overseas sellers are not willing to reduce prices any further.

“We have sold out most of the allocation at $1120/ton for Vietnamese homo-PP to Indonesia, up $30/ton from late last week and currently lifting prices to $1140/ton for the remaining quantity. China market is coming back and the SEA region should see some support,” a regional trader informed.    

Polyethylene (PE)

In the meantime, PTTGC Thailand unexpectedly shut down its 300,000 tons/year LDPE line on 28 November due to unspecified issues and the plant might remain off-line for a month. There have been reports that supply for LDPE film Mi – 4 grade is rather short in the local Thailand market. “We spotted the opportunity and re-exported approximately 500 tons of Saudi cargoes to Thailand at the price range $1120-1130/ton CIF term,” a Vietnamese trader informed. 

Movement in the import market is better, sources said. However, buyers are not completely convinced about the bullish outlook ahead now that supply is rather lengthy while upstream ethylene costs are soft.