Asia Daily PP PE Report 11 Apr 2016

In China, futures prices on Dalian Commodity Exchange rebounded from a depressed trading week with contract number 1609 for PP jumped CNY129/t ($20/t) to settled at CNY6803/t ($899/t without VAT). LLDPE futures have also added CNY70/t ($11/t) to reach CNY8355/t ($1104/t without VAT) thanks to significant hike in energy market.

However, market sentiment has yet to recover which caused domestic spot offers for both PP and PE shrunk another CNY50-100/t ($8-15/t) from late last week. A trader based in Beijing commented, “It seems the price reductions and the upsurge in the upstream market are not triggering any buying interest. We have not been able to conclude any deal on the first trading day of the week, yet we are not expecting any significant price cut given a series on plant shutdown this month.”

In the import market, most international sellers have not announced new offer yet with a converter in Yantai said, “Our overseas supplier has been supplying very limited number of cargoes recently and we are fortunate enough to have sufficient inventory on hand now. Demand for our end product is just regular and we think prices might be softer next month after the scheduled turnaround at some local plants.”

At the meantime, traders in the PE market continue to find re-export outlet for their cargoes as local demand diminished in line with the end of the peak seasonal agriculture film demand. A trader in Guangdong said, “We have missed out several re-export opportunities and at the moment we are having cargoes at bonded warehouse but at higher prices. Buying interest in other market is also slowing down, and we only can sell minimal quantity at the current prices.’       

In Southeast Asia, the polyolefins market opens the new trading week on a relatively stable to firm trend with couple of major regional producers announced new prices at higher level compared to last week. Demand on the other hand, started to show some of the first signs of withering. In the PE market, more re-export cargoes from China emerged in Vietnam, signaling a worrisome sign of dwindling buying interest in Asia’s biggest polymer importer. A buyer received offer for Middle East HDPE film at $1215-1220/t and Iranian LLDPE film at $1205-1220/t CIF Vietnam, re-export from China said, “We might purchase some of the LLDPE film cargoes since local market is short of this grade, other than that, we are not planning to make any replenishment at the moment. Outlook for May and June remains cloudy and large number of re-export cargoes proves that demand in China is not there. We prefer to be cautious in the coming days.”

Meanwhile, weak demand in Indonesia started to take its claims on market prices, as traders are more willing to give discount in order to conclude deals. One of the market sources added, “Local HDPE film is now more competitive than import from non-dutiable origins. We have some Thailand HDPE yarn cargoes on hand and we are open to negotiation with serious buyers.”

PP prices continue to climb in Southeast with a major Thailand maker announced new offers to Indonesia with $30/t hike on homo-PP cargoes to reach $1230/t CIF Indonesia, LC AS term. A market source reported, “Despite the high offers, our supplier is not having any cargoes at the moment. We were informed that spot cargoes would only be available by end of July, which is a month later than initial schedule. We think this might support the market in the near term since overall supply in Indonesia is till tight.”

A Vietnamese buyer received Chinese coal based PP at $1060/t CIF Vietnam, LC AS term added, “We are not planning to make any purchase at the moment. The availability of Middle East off-grade cargoes is pressuring domestic market from which prices have not been able to firm up despite firmer upstream values. We think market direction would only become clearer after the Labor Day considering number of events in the second half of April that might hinder trading activities.”

For detail Daily Prices in China and Southeast Asia market, kindly visit our website at www.commoplast.com. Please contact our representatives at commoplastinfo@gmail.com for log in assistance.