Asia Daily PP and PE Overview 30 April 2018

There are no trading activities in China as players are away for the Labour Day

SOUTHEAST ASIA 

• Limited trading activities ahead of the Labour Day holidays
• Plunging ethylene costs threaten PE supplier’s effort in keeping market firm 

Polypropylene (PP)

The regional PP market has not received any fresh offers on the first trading day of the week, and yet, suppliers remain optimistic about the near-term outlook. “We are receiving a high number of inquiries from Africa customers as supply here is tight. Asian PP market might not increase drastically in the near term due to constraint demand, but a certain thing is that prices are staying firm,” a regional producer said. 

Polyethylene (PE)

Ethylene costs in Asia continue to fall as expected due to heavy inflow of deep-sea cargoes from the USA and Europe that off-set all of the major cracker shutdowns in Fareast Asia region. Ethylene prices might extend the weakening trend in the coming days, sources said, which puts the Asian PE market in a rather shaky position.

“Major markets within the region are on holidays, making it difficult to gauge the near-term outlook. However, if USA suppliers become more active in leveraging the widely opened arbitrage window, the Asian ethylene market might fall deeper, which in turn, impact the sentiment in the downstream PE sector,” a regional player said.

In the meantime, buying interest for PE in local Indonesia market remains healthy, especially for LLDPE film, sources said, thanks to the late come back of Ramadan demand. This has encouraged the local producer to implement another $10/ton hike on the cargoes on the first trading day of the week. “However, converters are battling high production costs while end product sales might slow down toward the end of May. As a result, we are really concern over the near-term market outlook,” a buyer said.