Asia Daily PP PE Report 15 Feb 2016

In China, future prices on Dalian Commodity Exchange open the new week with decreases in which PP futures down CNY74/t ($11/t) to reach CNY6344/t ($835/t without VAT). At the meantime, LLDPE futures decreased CNY15/t ($2/t) to close at CNY8640/t ($1138/t without VAT).

Physical spot offers for both PP and PE in domestic market remain largely stable, however, buying interest has yet pick up as buyers are reportedly away from their desk till Chap Goh Mei celebration on 22 February. Most traders are expecting a fall in supply arise from a heavy maintenance shutdown across the region during Feb-Apr period, which might boost polyolefin prices.

A trader from Ningbo reported, “We are testing the market’s response by attempting a small hike today but the result is rather disappointed. Energy and feedstocks costs have increased recently, however we think that market direction will become clearer in the coming week when buyer return to the market.”

There is minimal number of offer in the import market and players are judging the impact of higher local inventory versus the upcoming maintenance shutdown. It is reported that stock on trader’s hand has also piled up during the holidays as a result of continuous cargoes arrival. However, market direction will be clearer after buyers return to the market completely.

In Southeast Asia, trading activities are reported to be mediocre and most players are monitoring further development in the nearby China market before deciding next move. In the PP market, a major Saudi maker open new offer with $10-20/t increased compared to before Chinese New Year to reach $860/t CIF Vietnam, LC AS term. A buyer received the new price said, “We are planning to make a small purchase but we do not expect any major movement in the near term given volatile energy market. We will only buy hand to mouth for now hoping to see clearer diction in the coming week.”

In the PE market, PTT Thailand will carry out a scheduled maintenance shutdown at its cracker and the downstream PE production during end Feb-March, which was reported earlier.  A Singaporean trader said, “Trading activities in the region is pretty quiet and players are monitoring movement in the China market. We think that prices might not be able to firm up significantly if demand does not pick up.” In local Indonesia market, a major maker has lifted local offers today yet buyers are still able to obtain discount in the distribution market due to weak demand.

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