Asia Daily PP and PE Overview – 25 January 2019

CHINA

·     Import PP holds firm with limited buying interest 

·     Local sentiment weakens further in the absence of buyers 

Polypropylene (PP)

Overseas sellers maintain a very firm stance on the import homo-PP offers to China despite the fact that purchasing interest is weakening as most buyers have started leaving for the Spring Festival. Vietnamese yarn sees $10/ton hike day on day to $1140/ton CFR China while Saudi cargoes hit $1100/ton mark.

At the moment, many converters have already stocked up sufficiently for the holiday needs and only traders are active in looking for competitive prices. “Until this moment, about 20% of our customers have purchased cargoes for February-March delivery. Therefore, we hope the post-holiday demand is healthy,” a trader added.   

Polyethylene (PE)

Meanwhile, total PP and PE inventories at Sinopec and CNPC piled up 5,000 tons from the previous trading day, underlining the weakening demand condition.  

It is interesting that USA cargoes are available in the market in the range $965-970/ton CFR China for LLDPE C6 film, however the response is not very strong. “We attempted to offer these cargoes to Southeast Asian buyers at $990/ton CFR SEA, however, it seems that customers are not very excited, too,” an international trading house informed. 

SOUTHEAST ASIA

·     Saudi maker stepped back on February PP, PE offers 

·     Customers make last minute replenishment before the holiday 

Polypropylene (PP)

Trading activities in the regional PP market are rather quiet on the final trading day of the week, though the sentiment remains firm that most suppliers refused any large discount. However, it also becomes more difficult to introduce further hike in the lack of interest from buyers. The market is at a rather balanced state.

“Import homo-PP from dutiable origins priced above the $1100/ton threshold is facing very strong resistance. The market might hold firm right after the Lunar New Year holiday, but we are very conservative about March outlook,” a regional buyer commented.

Polyethylene (PE)

A Saudi Arabia producer decided to step back on February shipment offers by $20/ton for HDPE film to $1090/ton and $30/ton for LLDPE film to $1020-1030/ton, all based on CIF Vietnam, LC AS. Buyers in this market still considered these adjusted prices to be less competitive, and likely sourcing alternative cargoes.

“In fact, we bought another 10 containers for Thailand HDPE film at $1060/ton, up $10/ton from last week but still more competitive than Saudi cargoes. This would be our last purchase before the Spring Festival,” a HDPE bag converter added.