Asia Daily PP and PE Overview – 22 May 2019

CHINA

·     Local market extended firming trend by sentiment slows down

·     Import market remains indifferent about stronger local ground 

Polypropylene (PP)

Total inventories at Sinopec and CNPC’s warehouses fell another 40,000 tons from the previous trading days to 765,000 tons – the first time the figure dip below the 800,000 tons threshold since the beginning of February 2019, right before the market took off for Lunar New Year.

Spot offers inched CNY50-100/ton ($7-15/ton) higher day-on-day but it appears that customers become less aggressive in off-taking additional cargoes. Players deem the slow down condition as normal citing that the market needs a break after continuous prices hike.

Polyethylene (PE)

According to CommoPlast data, import HDPE, LLDPE and LDPE film to China continue to slide lower regardless of the recovery in the local ground. Buyers are cautiously optimistic that import market might soon find support to regain stabilisation.

“We have to wait and see. Import market might not hit the bottom if the sentiment in the domestic market turns sour in the coming days,” said, a market source. 

SOUTHEAST ASIA 

·     Sluggish sentiment linger the regional market

·     Heavy expectation for reductions in new PP and PE offers 

Polypropylene (PP)

The import homo-PP market continues to gallop lower with Southeast Asian producers initiated larger price cuts to attract purchasing interest. Vietnamese cargoes see $30/ton reduction compared to the beginning of the week to $1130/ton FOB Vietnam. “But Indonesian buyers place bids at $1100/ton CIF Indonesia, signalling the reluctance among customers,” a Vietnamese trader commented.

In Vietnam, Thailand homo-PP witness $40/ton drop from last week to $1150/ton CIF, LC AS. “We are waiting for further reduction. Local traders are in panic to deplete cargoes. This could cause further deterioration to the market sentiment,” a buyer commented. In fact, a major trader has slashed offers for locally produced PP yarn cargoes to VND29,400,000/ton including VAT ($1150/ton without VAT), FD Vietnam, much lower than the current market level.

Polyethylene (PE)

Regional buyers are waiting for more overseas suppliers to announce June shipment offers and it is widely expected that LLDPE film prices might breach below the $1000/ton. 

“With the escalated political risks, demand in Indonesia is very weak at the moment. Customers are not interested in purchasing import cargoes, instead, sourcing from local distribution market to minimize price risk,” an international trader added.