Asia Daily PP and PE Overview – 7 January 2019

CHINA

·     Trading activities improved visibly

·     Import PP, PE offers remain stable to firmer

Polypropylene (PP)

The import homo-PP market continues showing a yo-yo mood and this time, prices below the $1050/ton threshold have not repeated. However, the number of transaction has improved visibly compared to last week, partially due to the pre-Lunar New Year replenishment, sources reported.

“We are eyeing cargoes for February – March arrival. The upstream costs are firmer and Middle Eastern cargoes are not widely available in large quantity. We might opt for some Southeast Asian parcels,” a PP storage box converter said.    

Polyethylene (PE)

Most import offers seen on the first trading day of the week are stable to $10-20/ton firmer from last week and buyers become more active in making replenishment. However, it is important to note that the purchasing momentum is not very strong yet. 

Delay in Iranian cargoes as a result of JAM Petrochemical shutdown, is one of the factors that encourage the market movement, as buyers need to find alternative material. “Up to 50% of our previously purchased Iranian PE cargoes are delayed for another one month. Supply might not be too much in the first quarter of the year,” a buyer added.  

SOUTHEAST ASIA 

·     Limited movement in the import market 

·     Local PE market in Indonesia plunged on weak demand, ample supply

Polypropylene (PP)

There are very limited offers for import homo-PP on the first trading day of the week, however, strengthening upstream propylene costs and better demand in the nearby China market might support firmer prices.

“We managed to sell Vietnamese homo-PP above the $1100/ton mark to China market, a level that Southeast Asian buyers showed little interest. Market is balanced and therefore, we expect the market to stay firm [in the near term],” a regional trader commented. 

Polyethylene (PE)

A major domestic producer in Indonesia slashed HDPE and LLDPE film prices by IDR660,000/ton or $47/ton compared the last price list opened on 24 December 2018. This is a combined effect of strengthening Rupiah against the US dollar and comfortable local supply, and the second factor played a larger role, sources said.

And regardless of the steep reduction in ethylene costs, overseas sellers are rather firm on import offers. “We are still having remaining PE cargoes [after three weeks of offering]. The principal supplier refused any additional discount but buyers continue to bid lower. Sentiment is not strong in Vietnam,” an international trader offer Saudi LLDPE film at $1010/ton CIF Vietnam said.