Asia Daily PP and PE Overview 02 Feb 2017

There are no trading activities in China as players are not back from the Lunar New Year holiday yet.

In Southeast Asia, players in Vietnam and Malaysia start to come back from the long holiday while couple of international makers have opened fresh offers to other regional market with increases. In fact, a major Saudi Arabia producer announced homo-PP prices to Indonesia with $40/ton hike to reach $1110/ton CIF Indonesia, LC AS term. However, buyers remain cautious about accepting such rapid price increment as local ground hold steady after the Lunar New Year holiday. A converter added, “Our Thailand suppliers claimed sold out their quantity while a Philippines producer only can meet 30 per cent of our required quantity. We are planning to purchase additional cargoes from local sellers since import prices might continue to firm up further in the near term.”

There are rather limited numbers of new offers available in the market at the moment, especially from Middle Eastern suppliers. Yet, regional buyers are confident about the continued firming trend, taking into account the current supply-demand dynamic alone. “The global political condition poses many uncertainties; one thing clear at the moment is that a series of plant shutdown is keeping supply limited. We have confirmed purchase of Saudi’s homo-PP at $1070/ton earlier this week and our supplier has yet to revert on the quantity available due to plant issues,” a Vietnamese buyer said.

In the PE sector, a Saudi producer informed of sold out their cargoes to Vietnam this week without any discount, touching $1200/ton for LLDPE film and $1170/ton for HDPE film, all based on CIF, LC AS term. A distributor source commented, “We have very small quantity this time due to persistent plant issues and our regular buyers have accepted the hike for that reason.” It is also reported that the producer’s plants are still under shutdown owing to unspecified technical glitches and might only come back online by mid of February. The source added, “Therefore, cargoes availably this month will be very limited.”

In addition, surging ethylene cots across the region also lend a supporting hand to the current up trend. In fact, ethylene based on CFR Northeast and Southeast Asia jumped $40/ton from last week to reach $1210/ton and $1075/ton respectively. “Buyers are still monitoring further market development, though suppliers in Asia has implemented price hike on their cargoes this week,” an Indonesian buyer said.