Asia Daily PP and PE Overview 13 December 2017

SOUTHEAST ASIA

• Supply – demand is on a tight balance
• Market awaits January offers with expected stable trend

Polypropylene (PP)

The regional PP market witnesses no major movement as the week proceeds. However, market participants are discussing a possibility of firmer PP block copolymer in the coming weeks as supply for this grade seems to be tightening up. Deals for South Korean PP block copolymer are reported at $1225/ton CIF Indonesia, LC AS term with a buyer said, “We were informed that offers in the coming days would be higher. We decided to make a small purchases to maintain safe level of inventories.”

Saudi Arabia maker open import homo-PP offers to Indonesia at $1170/ton CIF, LC AS term and no deals were reported at the time this report is published. A number of converters decided to skip purchases this round on comfortable stock on hand, “The recent flood hampered demand seriously. We hope to receive better number of orders in January,” a woven bag manufacturer said.

Polyethylene (PE)

The regional PE market remain on a tug of war between tight availability supply and sluggish demand and no suppliers are willing to give ground citing the lack of pressure and strong upstream ethylene costs. Middle Eastern HDPE film cargoes are offered in the range $1280-1300/ton CIF Southeast Asia, LC AS term with limited number of deals observed. “Our customers are concerning about softening trend ahead since China loses buying appetite. Trades are very slow,” an international trader informed. Domestic traders in Vietnam are no longer holding back on the cargoes, instead become more active in giving out offers.

International producers are still not having comfortable supply and in spite of the dull sentiment across Southeast Asia, couples are planning to implement small hike for January delivery cargoes. “We are still not having cargoes due to persistent plant issues. We are looking at a possibility to lift offers for the coming month,” a Middle Eastern producer said. Other producers from this region, on the other hand, are putting more favor to keep prices stable.