Asia Daily PP and PE Overview 7 September 2018

CHINA

• Tightening bank loan concern imports buyers 
• Import homo-PP availability might improve as all three new plants come online 

Polypropylene (PP)

Prime cargoes from the newly started up PP plant in South Korea emerged in China at the price level $1180-1190/ton for homo-PP injection and $1250/ton for PP block copolymer, CFR China, LC AS. Though available quantity is only 300 tons for each grade, sources believed that more materials should be coming in once the plant stabilizes production rate.

“We are seeing cargoes from new plants in Vietnam, Malaysia and South Korea at relatively competitive levels. Supply is improving along with these startups,” a trader informed.

Polyethylene (PE)

At least three local traders reported having bank loan rejected while applying to purchase 300-500 tons of Saudi LLDPE film at $1110-1120/ton CFR China, LC AS. “We are looking into other payment methods now. We could normally get loan for more than 1000 tons at one go,” a trader reported.

In the latest visit to Shenhua coal-based polyolefins warehouses, it is found that 60 per cent of the inventories are PE and out of which, a majority is LDPE materials. Joining the visit are also 5 more local traders, who mostly expressed less of bullish expectation for the near to medium term outlook on LDPE market. 

SOUTHEAST ASIA

• Resistance on import HDPE film keeps building up 
• Panic buying in local Indonesia eased as prices surged above acceptance 

Polypropylene (PP)

The mild panic buying among small to medium size converters in local Indonesia observed earlier this week seem eased towards the weekend as buyers expected the supply to improve in the near term. In fact, a major domestic producer - PT Polytama Propindo restarted its 180,000 tons/year PP unit in Balongan, Indonesia following a month-long maintenance and is steadily stabilising run rate. 

“We are seeing more deep-seas cargoes arriving by the end of the month. As a result, there might be some discount. Exchange rate is making it harder for businesses since lifting end product prices is a huge task now,” a converter said.  

Polyethylene (PE)

A major Saudi maker insists on HDPE film price at $1300/ton CIF Vietnam, LC AS term while agreeing to additional $10/ton on blow moulding grade to close some small deals at $1280/ton, claiming that there is a choice to divert material to Indonesia would Vietnamese buyers refuse to accept the prices. 

“The thing is another Saudi maker is offering HDPE film at $1280/ton for a pretty good grade. We naturally would go for more competitive cargoes. The local market is rather slow,” a Vietnamese buyer said.

In Indonesia, players are uncertain if acceptance for deep-sea HDPE film cargoes would remain the same this week following the steep depreciation of the local currency.