Asia Daily PP and PE Overview 09 June 2016

There are no trading activities in China today due to Dragon Boat Festival.

Within Southeast Asia, strong buying interest for homo-PP and LLDPE film persist in Vietnam while Indonesia and Malaysia are less aggressive in taking cargoes amid the fasting month. There is very limited number of new offers observed, though buyers in the country are actively searching for available cargoes. An international trader reported, “We received many calls from Vietnamese customers this week checking on homo-PP and LLDPE film cargoes availability. However, we have sold out June allocation and preparing for July offers in the coming weeks. Market appears to be picking up, in which we expect prices to follow the stable to firmer trend in the near term.”

A converter purchased 200 tons of Korean homo-PP at $980/ton, CIF Vietnam, LC AS term informed, “We have covered our production needs till October and we plan to withdraw to the side-line to monitor further movement.” Indeed, many medium to large size manufacturers reportedly replenished sufficient inventories till August-October period, which raise the concern about the sustainability of the current firming trend. A source added, “It is interesting that Vietnam is leading the rebound trend this round. Some of our suppliers have indicated further price hike next week; however we prefer to monitor further movement in the nearby China market before making decision.”

Regional PE market continues to follow mixed direction with import LLDPE film remains relatively stronger than other grades. However, market turns puzzled after a Middle Eastern LLDPE film cargo was offered to Vietnam at as low as $1080/ton CIF, LC AS term. A market source commented, “Meanwhile, our Saudi Arabia suppliers are very firm on their cargoes at $1160-1170/ton with the same term. We were expecting stable trend in the near term, however it becomes difficult to gauge the market direction now. We might need to monitor further development to have clearer outlook.”

In spite of that, many regional players are looking at a more stable trend for PE in the coming month with a producer said, “We sold June delivery cargoes at $1150/ton for HDPE film and $1200/ton for LDPE film to Southeast Asian customers, and we are planning to rollover our offer for July shipment. We think the upstream market might also gain support from stronger energy values while we started to see slight pick up in demand.”

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