Asia Daily PP and PE Overview 28 September 2018

CHINA

• Last minute buying support post-holiday expectation
• Demand for PP apparently stronger than PE 

Polypropylene (PP)

On the final trading day of the week before the market takes off for the long National Day Holiday, buyers continue asking for additional homo-PP quantity for post-holiday delivery. Last minute purchasing creates a positive expectation for the post-holiday term. 

“Supply for homo-PP is tight and we are a bit concern if local supplier would be able to deliver our parcels. Both Shanghai Secco and Fujian Refinery are scheduling major maintenance shutdown, which might limit supply further,” a buyer said.

Polyethylene (PE)

The local PE market is calmer than PP due to more comfortable supply. It is reported that converters in the agricultural film sector only source small quantity to cover production need in the first half of October while several decided to cut end product prices to deplete on-hand inventories.

“We remain hopeful that post-holiday replenishment activities would be strong. However, the steep fall in ethylene costs are rather concerning,” a trader added.

SOUTHEAST ASIA 

• Sales for LLDPE film Mi-2 smooth while Mi-1 struggle 
• Local demand for homo-PP in Indonesia improved slightly 

Polypropylene (PP)

There are very limited movements in the import homo-PP market that most players are buckling up for the Golden Week in China from 1-7 October. However, the severe production issue at a major Saudi Arabia producer might dent availability further in the near term as the company might need up to 6 months to obtains machinery parts. Regional BOPP buyers are particularly concern about the news.

Meanwhile, demand in local Indonesia market is improving, but not strong enough, sources said. Players see small to medium size converters return to make hand to mouth replenishment while local producers are not having sufficient allocation. “This trend might not sustain as PT Polytama Propindo might be back to spot market soon. Supply might ease,” a buyer said.  

Polyethylene (PE)

Distributor for Saudi Arabia producer claimed to have sold out LLDPE film Mi-2 with addictive at $1120-1130/ton to Vietnam and Indonesia market while struggling with Mi-1 cargoes at $1110/ton. Buyers are demanding for another $10-20/ton on the later grade citing the unpopularity.

“Besides, it is extremely difficult to close deals for HDPE film at $1270/ton at the moment. Buyers are looking at prices below the $1250/ton threshold. The price gap between HDPE and LLDPE film is too large, which many buyers do not see the support,” a distributor said.