Asia Daily PP and PE Overview – 22 February 2019

CHINA

·     Local demand remains below expectation 

·     Little changes observed in the import ground 

Polypropylene (PP)

Inventories at Sinopec and CNPC’s warehouses fell another 40,000 tons day-on-day to approximately 950,000 tons as on 22 February. Despite the quicker pace of inventories digestion, players said that there is still no sign of heavier investment or speculations.

Several PP converters reported having fully returned to work, however, still struggling with the labor issues. “Our on-hand inventories are not too high. We will have to make some replenishment, but the current prices are too far from our acceptance,” a container maker said.  

Polyethylene (PE)

The import market shows no changes day-on-day, though a number of traders attempted to open offers at $25-35/ton above the producer’s price list, in line with the surging ethylene costs. 

There are market talks that approximately 200,000 tons of Iranian PE cargoes are due to arrive in China in the coming weeks, which concern buyers to a certain extent. However, this information has not been verified at the time this report is published. 

SOUTHEAST ASIA 

·     Local Indonesia continue seeing better deals for PE 

·      More Saudi maker announce March shipment offers 

Polypropylene (PP)

A Saudi Arabia producer collects bids for homo-PP yarn and injection in Vietnam at the level $1090-1100/ton CIF, LC AS and has yet to set final prices. It appears that only converters are interested in placing bids while local traders are more cautious. 

Sources explain that local demand has yet to recover after the long Lunar New Year holidays, which keeps local prices at a rather low level. “We have good allocation this time and so far the number of bids collected has taken up to 70% of the quantity. The lower end of the bid might not be successful, but we are waiting for the principal to announce the final decision,” a distributor informed.  

Polyethylene (PE)

Purchasing activities for HDPE and LLDPE film in local Indonesian continue showing improvement and deals in the distribution market are done at much higher levels compared to earlier this week.

“We see better transactions for HDPE film than LLDPE film. With the support from the upstream costs, we hope to stimulate demand further in the coming week,” a trader said while reporting deals for locally produced HDPE film at IDR16,400,000-16,700,000/ton and at IDR16,560,000/ton for LLDPE film, all excluding VAT, FD term. 

In the meantime, another Saudi Arabia maker announced March shipment offers at mostly stable levels, except for $20/ton increased in HDPE film exclusively to Vietnam. “We hope to see better acceptance among buyers. Supply is not too ample because many integrated producers prefer to participate in the ethylene market instead of making PE,” a source close to the maker commented.