Asia Daily PP and PE Overview 21 December 2017

CHINA

• Import PE does not respond to stronger ethylene costs
• Import PP shows early sign of firming up

Polypropylene (PP)

Import homo-PP to China is showing some early signs of moving upwards as prices at $1130/ton CFR China are not repeating towards the end of the week. Major Saudi Arabia maker keep new offers at $1160/ton, CFR China, LC 60 days term and several deals have been reported. “Only regular buyers accept the new price levels while other are very reluctant,” a trader said. However, this could be the beginning of the trend and other suppliers might soon implement similar firm stance on the cargoes.

Meanwhile, domestic prices above the CNY9500/ton ($1230/ton without VAT) threshold on EXW China, cash equivalent are facing stiff resistance. Converters are only interested in cargoes at the lower end of the overall price range, which limited producer’s ability to implement large hike despite lacking of any inventories pressure.  

Polyethylene (PE)

Import PE market is not responding to the surging ethylene costs. Overseas makers, including those from Saudi Arabia, Iran and USA decided to lower offers for LLDPE film by $10/ton week on week given sluggish purchasing activities. “We are having 300 tons of prime grade USA LLDPE film for February shipment selling at $1130/ton CFR China, LC 90 days term. Respond is very moderate though we managed to sell out the quantity,” an international trader said.

Thailand LDPE film also sees $15/ton from last week to $1210/ton CFR China, LC AS term. “We are not having any HDPE and LLDPE cargoes to offer this week. Our regular customers have bought some lower costs cargoes earlier this week, hence having very little interest for now,” a source close to the producer said. 

SOUTHEAST ASIA

• Cautious buyers accepting higher import homo-PP prices
• Stronger ethylene costs encourage firm stance among PE suppliers

Polypropylene (PP)

Major Saudi Arabia producer lifted import homo-PP offers to Vietnam by $20/ton compared to beginning of November to $1190/ton CIF Vietnam, LC AS term for March 2018 arrival. Deals for the cargoes are reported at $1170/ton with the same term, mostly converters are making purchases with a woven bag manufacturer said, “Market seems moving up and we decided to stock up a small quantity first while continue watching out for further development.” Meanwhile, traders are not very active fearing demand condition in post Lunar New Year term might be softer.

International traders are reporting smoother sales in Indonesia after conceding to small discounts on previous allocation. Deals for Middle Eastern homo-PP stand at $1160-1170/ton while Southeast Asian cargoes at $1200/ton CIF Indonesia, LC AS term. “Customers seem to have realized that the current trend is set to sustain in the coming month. The resistance is no longer as strong as it was in the previous week,” an international trader said. Purchasing activities in local ground is also reported to have picked up slightly.

Polyethylene (PE)

Overseas sellers started setting final prices for January shipment offers with only minor discount from initial price list. Stronger ethylene costs fuel supplier’s determination in keeping firm stance on the cargoes, in addition to the lack of inventories pressure. “Our suppliers is not willing to give any further discount on LLDPE film parcel as allocation is very limited stemming from the recent plant shutdown. We might only make a small purchase to keep safe inventories level,” a Vietnamese buyer received final offer from a Saudi producer at $1190/ton for LLDPE film said.

Tight supply for HDPE in domestic Indonesia is worsening. A non-integrated domestic producer is having brief maintenance shutdown at HDPE plant at the moment and might not restart on schedule given the high ethylene costs at the moment. Distributors therefore are selling PE cargoes to buyers at $10-20/ton above producer’s price list. “HDPE film is shortage now. Buyers are taking off for holidays and many want to have some inventories on hand, making sentiment warmer this week,” a trader said.