Asia Daily PP and PE Overview 29 May 2018

CHINA

• Local trading activities seem improved 
• Import market hold steady, buyers are attracted to offers at the lower end of the price range 

Polypropylene (PP)

Thanks to the recovery in futures trading, spot sentiment is having some improvement and buyers are more active today. Total PP and PE inventories at Sinopec and CNPC’s warehoused fell about 30,000 tons from the previous trading session to approximate 745,000 tons as of 29 May 2018, underlining better transactions. 

“We attempted to lift local homo-PP offers by CNY50-100/ton ($8-16/ton) to see how market respond and received only limited feedback. Buyers are still cautious, and therefore, might only source cargoes based on need basis,” a trader informed.  

Polyethylene (PE)

Import offers for regular PE cargoes from Qatar inched $10/ton lower from last week to $1180/ton for LLDPE film and $1190/ton for LDPE film, CFR China, LC 90 days term. Buyers might get another $10/ton lower for shorter payment term. “Sales are acceptable considering the competitiveness in the pricing. We only have a small quantity remaining, though having no intention to introduce any hike given the softness in local ground,” a distributor reported.

In contrast to the PP market, local suppliers continue cutting spot PE offers by CNY50/ton ($8/ton), as demand is weak during the off-peak season. Sources are bearing better expectation for July and August, and yet monitoring the import arrival to have a better gauge on the supply.  

SOUTHEAST ASIA 

• Limited trading activities as most markets are on Wesak holiday 
• Plunge in energy value impact buyer confidence in Vietnam 

Polypropylene (PP)

Most markets in Southeast Asia are on Wesak day holiday, which limits trading activities across the region. Meanwhile, import homo-PP to Vietnam continue inching higher with dutiable cargoes originated from Middle East ranging $1305-1330/ton CIF, LC AS term, however, demand is not strong.

“We visited a number of regular customers over the past couple of day and it is clear that buyers are unable to accept homo-PP above the $1300/ton threshold. We might need to concede to large discount in order to attract buying interest,” commented a distributor, who offered Saudi Arabia homo-PP at $1320/ton CIF Vietnam.

The domestic market appears to have lost some of its fire this week after crude oil prices plunged from multi-year high levels over the past several days. Traders are complaining about the inability to increase prices or attract buying interest despite the quick depreciation of the Vietnamese Dong. “We did not agree to sell locally held Saudi cargoes at VND33,800,00/ton ($1346/ton without VAT) last week and this week, customers are not willing to buy even at this level. However, availability is tight here,” a trader added.

Polyethylene (PE)

The surge in ethylene costs has yet to spread any strong impact on the sentiment in the downstream PE market. Customers are very reluctant to make purchases, especially for LLDPE and LDPE film citing the bearish prospect for these grades. Vietnamese buyers have completed negotiating for Saudi cargoes that were offered in the previous week and deals have been realised at $1170/ton for LLDPE film and $1360/ton for HDPE film, CIF Southern Vietnam, LC AS term, LSD 15 August.