Asia Daily PP and PE Overview – 10 December 2018

CHINA

•        Import PP, PE ride higher on reduced sales pressure 
•        Local sentiment soften slightly 

Polypropylene (PP)

Import offers for Indian and Saudi Arabia cargoes emerge at $1050-1080/ton CFR China, LC AS term. Apparently, prices below the $1050/ton mark have disappeared, however, higher offers failed to attract sufficient purchasing interest.

In the local ground, traders are offering CNY50-100/ton ($7-14/ton) discount on spot cargoes on the back of softer sentiment. Buyers prefer to slow down purchases to assess the outlook now that the macro environment is not in favor to keep high stock.   

Polyethylene (PE)

Similar to the PP peer, import PE to China also traded at higher levels. Two Middle Eastern producers announced new price list at up to $60/ton hike week-on-week. 

“We managed to sell well for LLDPE and LDPE film since prices only increased $10-20/ton to $1010-1020/ton for January shipment. Buyers have replenished well in the previous weeks and larger price increment might face stiff resistance at this time,” a producer added.  

SOUTHEAST ASIA

•         Import PE offers emerge at higher levels regardless of ethylene costs
•         Sentiment calm as buyers take time to evaluate the market outlook 

Polypropylene (PP)

The regional PP market is rather firm though there are only a few new offers from overseas suppliers. Cost-push and reduced sales pressure are the main factors encouraging such movement, but Southeast Asian buyers are not aggressive in scouting for new cargoes. This is because most customers have already stocked up comfortable stock and prefer to take a more conservative stance to evaluate further market development.

“Domestic market becomes more competitive now. The exchange rate is not favorable for import at the moment,” an Indonesian buyer received offers for Vietnamese homo-PP yarn at $1150-1160/ton CIF, said.   

Polyethylene (PE)

Two Saudi Arabia maker open new offers for PE to Vietnam at $20-30/ton increased from last week, totally shrugged off the steep plunge in the upstream ethylene costs. The claims are that supply is tightening following the year-end clearance period. Vietnamese buyers are not very confident about the sustainability of the current trend, pointing to the lack of support from demand and upstream cost for a sustainable firming trend. 

In local Indonesia market, traders are not matching the latest reduction from a major domestic producer. “We have already depleted most of the cargoes. The producer’s price list was too high compared to actual market levels, therefore the need for adjustment. Buyers are gradually entering the holiday mood. Sentiment might continue to weaken in the coming weeks,” a local distributor added.