Asia Daily PP PE Report 25 Apr 2016

In China, futures prices on Dalian Commodity Exchange posted an impressive gain on the first trading day of the week in spite of slower trading activities. Contract number 1609 for PP advanced CNY152/t ($23/t) to reach CNY6913/t ($909/t without VAT) while LLDPE futures leaped 235/t ($36/t) to settle at CNY8660/t ($1139/t without VAT).

Domestic spot offers for both PP and PE has also gained support from the firming futures trading as price list announced at CNY50-100/t ($8-15/t) higher than last week. However, trading activities are muted alongside the opening of ChinaPlast event.

A trader from Beijing commented, “Most of our regular customers are attending the exhibition from which we see market is very slow. We are not able to conclude any deal today even though we are willing to give discount for serious buyers. We expect trading activities to remain limited throughout this week, and that outlook in the coming month does not appear so optimistic to us.”

There is minimal number of import offers available today with sellers are mostly on the side-line waiting to see clearer market direction. A distributor in Ningbo said, “We are not having much cargoes on hand now and we see very little chances to close deal today since buyers are absence from the market. We expect prices would follow mostly stable trend in the coming days and discounts might be available on deals.”   

In Southeast Asia, market sentiment turns quiet on the first trading day of the week as a number of players are away from their desk for ChinaPlast exhibition. There is little movement observed in the PP market and most suppliers are monitoring further development amid firming upstream costs but stiff buyer resistance. A major Southeast Asian producer decided to lift offers for May delivery PP cargoes by as much as $60/t compared to last month, yet the overall price level remained relatively stable from last week. A distributor offered on behalf of the producer said, “Our principal is not having sales pressure as they are trying to build up stock before the major maintenance shutdown in July. However, their offers are rather competitive to give our customers room to deal with slower end product business.”

Domestic markets within the region have also seen slower demand with a trader in Vietnam said, “We are trying to keep our prices for locally held Saudi cargoes stable, yet buying interest is just so weak. Local market is now traded below the import offers; therefore we are not confident in replenishing cargoes at the current price level. We are feeling very uncertain about the market direction in the coming week.”

In the PE market, HDPE film offers continue to emerge at lower level compared to other grades thanks to comfortable supply in the market. Vietnamese buyers reported to have received official offers for HDPE film at $15/t below last week’s for both Taiwanese and Thailand origins to reach $1225/t and $1235/t CIF, respectively. A buyer commented, “We are getting even more competitive price in the distribution market as sluggish demand is forcing traders to give larger discount than normal. The LLDPE film market is relatively more stable due to limited supply, however, we are not expecting any further upward movement in the near term given falling ethylene monomers costs.”

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