Asia Daily PP and PE Overview – 21 January 2019

CHINA

·     Purchasing activities remain stable 

·     Import PP and PE offers mostly move higher

Polypropylene (PP)

Sentiment in the domestic ground is rather stable, and it appears that arbitrage traders are more active than others in replenishing materials. “This might help to maintain the trading atmosphere this week. Many logistics companies have stopped the long haul orders and the market might officially enter the holiday mood by next week,” a market source commented.  

In the import ground, suppliers have yet to open new price list but repeatedly highlighting the plan to lift new offers slightly.  

Polyethylene (PE)

Singaporean producer lifted PE offers by $20/ton from last week, sending the latest price to $1070/ton for LLDPE film and $1240/ton for metallocene (mPE). Meanwhile, traders also open new HDPE film prices for various cargoes from Middle Eastern at $1110/ton CFR China, LC AS term.

“Respond on HDPE film is soft. Customers are resisting prices above the $1100/ton threshold, and therefore, we are discussing with some regular buyers to conclude deals,” a trader informed.

Market sources reported that shipment for Iranian cargoes are gradually coming back after a delay of 2-3 months. The supply concern might be eased by the time buyers come back from the Lunar New Year.

SOUTHEAST ASIA 

·     February shipment offers started to emerge

·     Vietnam market remains calm, but Indonesia sees more upticks 

Polypropylene (PP)

There are only a few new offers for import homo-PP observed in the market and mostly at higher levels from last week. Suppliers are taking firmer stance following healthy sales results in China and Indonesia in the previous week.  

Indian homo-PP yarn is offered at $1100/ton to Vietnam while Thailand cargoes are $10/ton higher week-on-week at $1110/ton. However, customers here are not responding very positively given the sluggish condition in domestic ground. “Locally produced cargoes are offered at VND28,200,000/ton including VAT (or $1105/ton without VAT), FD Vietnam. Import offers are just for portraying the firming trend purposes and see very limited inquiries from customers,” a source commented.  

Polyethylene (PE)

A Saudi Arabia producer down adjusted PE offers for February shipment by $10/ton month on month to Indonesia and Vietnam, though buyers are planning to ask for an additional $20/ton discount on deal. 

Regional buyers are generally expecting the import PE market to stabilize given the stronger demand in the nearby China market ahead of the Lunar New Year in combined with the surging ethylene costs. Having said so, it is important to note that there is a heavy sense of caution across the market as players feel uncertain about the outcome of the trade truce between China and the USA, while supply might improve following the startup at a new plant in Malaysia.