Asia Daily PP and PE Overview 03 Oct 2016

China market is officially off for National Day holidays from 1-7 October 2016.

In Southeast Asia, sentiment on the first trading day of the week is unusually quiet, especially with the absence of Chinese players. Trading activities are limited and plunging upstream costs amid strengthening energy values has caused huge confusion among buyers. A trader in Vietnam informed, “Domestic market is very quiet. Some traders are trying to increase their offers, however we elected to maintain our prices unchanged. We were hoping that surging energy values would stimulate buying interest, and this might take some time. Our regular customers see no improvement in end product orders.”

Another converter in the country received Middle Eastern homo-PP yarn at $1010/ton CIF Vietnam, LC AS term commented, “Domestic suppliers are also lifting their offers in line with the energy market, which illuminate a rebound. However, we see higher crude oil prices are the only factor that supports the market at the moment. We might hold our purchases for couple of days more before committing to fresh replenishment.”

Meanwhile, a major local producer in Indonesia rollover their PP and PE offers from last week and a good sign is that buyers started to restock, especially for PP. A trader commented, “Now that issues with tax amnesty are settled, players slowly return to the market to make replenishment. The firm stance from the domestic maker also supports the overall sentiment and condition might improve further in the near term.” The source also added that demand for HDPE film remains weak in the country.

The regional PE market sees little changes and most suppliers hold firm on their offers despite significant dropped in ethylene costs in Northeast Asia. It is reported that Shell Singapore might need to remain offline for several months after the compressor trip incident last week as the company seeks to replace the parts. This is likely to keep the ethylene costs in Southeast Asia stable in the near term; however, the arrival of international cargoes could pressure prices later. Demand for HDPE film is reported to be weak across the region and supply persists in the comfortable zone. A seller informed, “We are very struggle to move HDPE film cargoes these days as converters are reluctant to make purchases, despite market has entered the peak seasonal demand. We are very skeptic about the near to medium term outlook for HDPE film grade.”