Asia Daily PP and PE Overview – 11 January 2018

CHINA

·     Players are more optimistic about PP than PE 

·     Appreciation of Chinese Yuan boost sentiment in import ground

Polypropylene (PP)

Most international suppliers claimed having sold out the weekly allocation to China by today and that prices below the $1060/ton level are becoming scarce. Sources reported that BOPP converters are enjoying healthier profit margins than PE packaging, which might encourage more replenishment in the near term.

In the local ground, inventories at Sinopec and CNPC’s warehouses unexpectedly rose 5,000 tons from the previous trading day. However, the spot offers only witness CNY50/ton ($7/ton) reduction in term of prices. 

Polyethylene (PE)

More deals for HDPE film are observed in the import market, mostly at lower levels week-on-week. Demand for HDPE film somehow is described as much weaker than other grades at the moment. 

“We purchased regular Saudi HDPE film at $1080/ton CFR China. The supplier is more willing to negotiate, plus the appreciation of the Chinese Yuan against the US dollar make it cheaper to buy imports,” a source reported.

SOUTHEAST ASIA 

·     Limited movement on the final trading day of the week 

·     Calmer sentiment in local markets might challenge firm import offers 

Polypropylene (PP)

Despite the fact that deals for Saudi Arabia homo-PP yarn have been achieved in the range $1050-1070/ton CIF Vietnam, LC AS term in the previous trading day, an international trader remain firm at $1100/ton level citing healthier demand from China market.

“We decided to postpone our purchases until the supplier agrees to bring prices to market level. The domestic ground is very competitive at the moment, and we are not confident about the post-holiday market outlook,” a local trader said.  

Polyethylene (PE)

As reported earlier, there are some replenishment activities for import LLDPE film from regular origins in Vietnam, however, this might not be sufficient to support any major hike for February shipment offers, sources said. Southeast Asian buyers are expecting a more a stable trend in the near term, as most buyers are getting ready for the Lunar New Year holidays.

Overseas sellers remain hopeful on a stronger purchasing interest in the coming week, but with the sluggish movement in the local ground in Indonesia, Vietnam, and Malaysia, regional buyers might be conservative about large buys.