Asia Daily PP and PE Overview – 6 December 2018

CHINA

•       Market sentiment calm down after days of replenishment
•       Buyers show resistance to higher prices

Polypropylene (PP)

Purchasing interest for homo-PP cargoes slows down significantly towards the end of the week. It appears that Chinese buyers have replenished comfortable inventories over the past several days and currently taking a break to assess market outlook before making further decision. “Our customers become less active today. Prices are firmer bust most sellers are open to negotiation,” a local trader said.

Renewed concern over the trade-talks between China and the USA also dampens the sentiment.

Polyethylene (PE)

Suppliers, who have lifted prices in the previous day, are now facing weaker response from the market. Indian LLDPE film is firm at $1000/ton CFR China, LC AS term with limited availability. In fact, a distributor said that they only have 500 tons allocation and already sold out during the first half of the trading days.

While supply is tightening following healthy sales results in the past several trading days, Chinese buyers are also taking ore cautious stance fearing that plunging upstream costs might drag the market down again. 

SOUTHEAST ASIA 

•        More offers for homo-PP appears as China market calm down 
•        Shrugging off the ethylene costs, overseas sellers firm on PE offers

Polypropylene (PP)

By the second half of the trading days, more offers for import homo-PP yarn and injection emerge in Southeast Asia market as purchasing activities in China slow down. In fact, three major Indian producers are here to offer at $1070-1085/ton to Vietnam while deals for Saudi homo-PP yarn hold steady at $1070/ton with the same term.

“For the grade that we are using, the Thai supplier slashed offers by $70/ton from the beginning of the week to $1145/ton. We are confused [with the market trend]. For this, we might only procure 50 percent of the needed quantity while waiting further,” a laminated woven sack maker informed. 

Polyethylene (PE)

The $130/ton reduction in ethylene prices compared to a week ago does not deflate overseas suppliers. “Buyers are bidding at $1030/ton for HDPE film cargoes but we rejected immediately. Inventories are low at the moment and we plan to be firm at $1090/ton CIF Vietnam term,” a Thailand supplier added.

There have been reports that a major supplier for USA PE withdrew offers for LLDPE C6 film in the previous trading day, has re-opened new offers with $10/ton increased to $970/ton to Vietnam.