Asia Daily PP and PE Overview 17 January 2018

CHINA

• Falling futures market generate no effect on spot trading
• Strengthening Chinese Yuan support demand for import cargoes

Polypropylene (PP)

Two consecutive falling sessions on Dalian Commdity Exchange resulted in a total loss of CNY368/ton ($57/ton) on PP futures and CNY380/ton ($59/ton) on LLDPE futures does not seem to have much effect on the purchasing interest in spot ground. Price wise, offers for spot homo-PP based on EXW China, cash term have dropped by up to CNY100/ton ($15/ton) from the previous trading day, however, purchasing activities remain satisfactory. “Buyers are building inventories ahead of the long Lunar New Year,” a trader said.   

Polyethylene (PE)

Import HDPE film to China surge above the $1400/ton threshold as Taiwanese cargoes appear at $1420/ton CFR China, LC AS term. No deals have been reported at this level yet. “Prices are too high and shipment date is too far. There are too high risk associated with purchases of HDPE cargoes at the moment,” a market source said. The general cautious stance might cause drop in import arrival quantity in the coming months, which might keep the current trend sustainable.

At the meantime, import LDPE film market continue to revive with major Qatari maker lifted offers for this grade second time this week, bringing latest price to $1250/ton CFR China, LC 60 days term.

It is reported that demand for LLDPE film from agricultural film makers in Northern China remains healthy despite the recent weakness in futures trading. “Our customers have built approximate 70% of the needed inventories for the long holiday ahead, and might continue to purchase in the coming day,” a trader said. Demand for agricultural film normally peak during March. 

SOUTHEAST ASIA

• Indonesia market shows weakness in trading activities
• February shipment offers for PE emerged at higher levels

Polypropylene (PP)

There are very limited new offers for import homo-PP to the region. Most overseas sellers are holding very firm stance on the available cargoes with strong intention to implement further hike in the near term. However, demand in Indonesia appears to be softer than expected, with local traders started stepping back from the previous hike, which might result in strong resistance on import cargoes.

A Thailand maker open new offers at $1300/ton for homo-PP, CIF Indonesia, LC AS term informed, “Buyers are not convinced about the increases as other Southeast Asian cargoes are transacted in the range $1240-1260/ton CIF Indonesia only. We are not having quantity at the moment given the maintenance shutdown plan in February.” A number of converters reported to have stocked up comfortable inventories up to March, hence in no rush to make replenishment.

Polyethylene (PE)

Major Malaysian producer lifted February shipment offers by $20/ton for LDPE film to $1310/ton and by $50/ton for HDPE film to $1350/ton, CIF Vietnam, LC AS term. Deals for LDPE film cargoes have been reported at $10/ton reduction from initial price list. A common trait among Vietnamese traders at the moment is the reluctance to make large purchases and most prefer to hold on the existing stock, fearing the cloudy outlook in the post-Lunar New Year term.

In related Plant Status news, both PTTGC and SCG Chemical are mulling over maintenance shutdown at HDPE lines in February, which might result in an estimated production loss of more than 33,500 tons of HDPE and potentially hamper the already tight supply condition. Detailed information is available on www.commoplast.com