Asia Daily PP and PE Overview – 26 December 2018

CHINA

•        Overseas sellers face difficulties in lifting offers to China
•        Purchasing interest for LLDPE film seems better than others

Polypropylene (PP)

Even with a Saudi Arabia producer stepped back on import homo-PP offers by $20/ton from the initial price list to $1030/ton CFR China, LC AS term, Chinese traders remain hopeful that market could revive in January.

Many converters planned to off for the Lunar New Year holidays until the Chap Goh Mei festival on 20 February, meaning that more stocks are needed during the off time. “We are on the watch out mode for the pre-Lunar New Year replenishment. The first and second week of January is crucial and we think this could support the market to regain some strength,” said, a trader.

Polyethylene (PE)

Apparently, Chinese buyers are showing better appetite for LLDPE film however; most deals are done at the lower end of the overall price range. “We sold approximately 3000 tons of the material after conceding to $20/ton discount at $1080/ton CFR China. We are not sure if this could sustain given the improving supply condition in domestic market,” a Thailand producer reported. 

The HDPE film market is much slower, sources said. 

SOUTHEAST ASIA 

•        Limited movement as the market is on holiday mood
•        Reduction in offers from Saudi maker continue facing resistance 

Polypropylene (PP)

There is only a couple of suppliers opens new homo-PP offers to the region, but mostly at softer levels. In fact, Vietnamese cargoes see $10/ton drop week on week to Indonesia at $1110/ton CIF, LC AS. Buyers here have mostly left for the year-end holiday, causing a quieter than usual sentiment.

In the meantime, a Saudi maker slashes homo-PP injection prices by $50/ton from last month to $1100/ton to Vietnam, and yet, buyers are looking at $40-50/ton lower for deals. “We think it is difficult for prices to drop more than $50/ton. We have been observing over the past three weeks, customers tend to buy once the supplier agreed to the level $1060-1070/ton. There is no point for the seller to send prices deeper than these accepted levels,” a buyer said. 

Polyethylene (PE)

A Saudi Arabia announced January shipment offers at $1070/ton for HDPE film and at $1030-1040/ton for LLDPE film CIF Vietnam, LC AS term. Buyers are asking for up to $40/ton discount from the initial price list.

However, it appears that the regional LLDPE film market is regaining stabilization with sources pointing to the fact that the current prices are near to the lowest level since 2009. “Middle Eastern cargoes if reach $1000/ton to Southeast Asia, this could be the bottom. We believe that market cannot go any lower considering the current demand condition in China and the cost factor,” a regional buyer added.