Asia Daily PP PE Report 04 Apr 2016

In China, there is no trading activity today as the market is off for Tomb Sweeping holiday. Players shall return to their desk by tomorrow, Tuesday, 5 April 2016.

In Southeast Asia, trading activities are slow with firm sentiment remains in place. There is very limited number of import offer observed in the regional market today, however, buyers appears to be waiting to see the impact of weakening energy prices on the market. There is couple of sellers maintaining offers for Middle East homo-PP at $1090-1100/t CIF Vietnam, LC AS term, stable from last week. A buyer commented, “Domestic market has slowed down significantly driven by falling energy values. We received offers for locally held Middle East homo-PP at VND500,00/t ($22/t) lower compared to last week yet we are not expecting any reduction from the import market as supply tightness continue to provide support.”

Meanwhile, a major Indonesian producer decided to lift domestic offers for homo-PP raffia and injection by $55/t and $35/t respectively on the first trading day of the week. A trader commented, “There is not much spot cargoes available at the moment, yet we are not able to conclude deals today as buyers are complaining about unaffordable prices. We think that market cannot climb any further without the support from downstream demand.”

The PE market has not seen much movement on the first day of the week while limited supply continues to play a primary role in keeping the market firm. Most players in Malaysia have raised their concern over the current local supply condition. A market source commented, “Domestic market is very tight now and our supplier was forced to March deliveries to this week. This situation might prolong until May in which many traders are now attempting to implement further increases on their available cargoes. Some of our customers informed that they are trying to utilize more of LDPE film grade to substitute the shortage of LLDPE film.”

Another converter in Indonesia was not very optimistic about the market outlook in the second quarter of the year said, “We expect demand from packaging sector to slow down by June due to double effect from fasting and school holidays month. We have sufficient cargoes till mid-April and we plan to source minimal quantity for now. Our international supplier informed that they sold HDPE film to Indonesia with $40/t discount from initial offer level, yet they are struggling to attract customers. We prefer to maintain conservative stance in the near term.”

In the production status news, Thailand’s PTT Global Chemical (PTTGC) has restarted its LDPE and LLDPE lines after a scheduled maintenance shutdown, however, no spot offer is expected this week as the company is clearing backlogs and making metallocene grades. The company is planning to restart its 1 million ton/year ethane cracker this week after a slight delay from the initial schedule.

In another news, Thai market will be closed for Songkran Festival next week from 13 April to 15 April.

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