Asia Daily PP and PE Overview 3 October 2017

There are no trading activities in China as players are away for National Day holiday and Mid-Autumn Festival. Market would resume on 9 October.

Southeast Asia market remains very much quiet though overseas suppliers started opening new offers. A major Saudi Arabia producer conceded to a small discount of $10-20/ton on LLDPE film and PP cargoes after a week long holding firm. There is no discount given on HDPE film cargoes. Vietnamese buyers are still reluctant to proceed with purchases claiming more competitive cargoes available in domestic spot market. “There are many low costs cargoes arriving in recent weeks, and therefore we might only replenish cargoes from local ground. Import prices are too high and too risky, especially with ethylene costs show signs of softening trend,” a buyer commented.

Domestic PE market in Indonesia is under pressure as a major domestic traders keeps offers low in spite of market effort to maintain firm stance, hoping that demand would come back soon. “However, we are planning to just purchase hand to mouth basis as year end orders are not as good as the last quarter. We are not so sure if new inquiries would be coming in later, and at the moment, we are waiting for further discounts before taking position,” a converter in the flexible packaging sector said.

International suppliers also confirmed the difficulties facing in attracting buying interest in Southeast Asia without agreeing to considerable discount. “Therefore, we are diverting the cargoes to Turkey and South Africa. We are not having large quantity at the moment due to plant shutdown,” a Saudi Arabia producer informed.

The regional PP market remains very firm with most Middle Eastern homo-PP cargoes stand at $1170-1180/ton CIF Southeast Asia term. An international trader sold Saudi Arabia homo-PP yarn at $1170/ton to Vietnam said, “There are still inquiries at this price level, and thus we are in no rush to make any adjustment.”

Regional players are technically waiting on the side-line for clearer indication on the post holiday demand condition in China before making decision. At the meantime, hoping that suppliers would loosen stance on the cargoes to close deals around the $1150/ton threshold. “We place bids at $1160/ton for Saudi Arabia homo-PP cargoes and the supplier rejected. Market trend might only become clearer by next week and we might postpone our replenishment,” a Vietnamese buyer received offers for Saudi cargoes at $1180/ton CIF Vietnam, said.