Asia Daily PP and PE Overview 8 October 2018

CHINA

• Post-holiday demand remains steady 
• Tight supply, strong buying interest continue boosting PP prices 

Polypropylene (PP)

Both domestic and import homo-PP market in China extended the firming trend on the first trading day after the weeklong National Day holiday. At the moment, both markets have reached the all-time high this year and yet, purchasing interest remains healthy.

In the import market, deals for Southeast Asian homo-PP yarn and injection cargoes are seen at $1300-1320/ton CFR China, LC 0-90 days term, $30-40/ton increased from the pre-holiday period. In the local ground, limited availability is the main driver supporting the sharp hike in the homo-PP market. At the current spot offers, sources claimed that import non-dutiable cargoes priced at around $1300/ton mark are very competitive.  

Polyethylene (PE)

Despite the firmer futures market, PE buyers are much more conservative than PP fearing that weakened ethylene costs would cap the market from any drastic hike. “We managed to sell some quantity of Saudi LLDPE film at $1140/ton CFR China, but interest is not as strong as expected. The preparation for the Single Day sales shall already take place, hence we hope to see better movement in the near term,” a trader informed.   

SOUTHEAST ASIA 

• Limited movement as market is on a watch-out position 
• With strong demand from China, SEA PP market might soon catch up 

Polypropylene (PP)

There are very limited offers for import homo-PP on the first trading day of the week. However, buyers started developing a firmer belief that market might sustain an upward movement in the near term considering the strong appetite among Chinese buyers in the post-holiday term. 

In domestic Vietnam market, traders started introducing VND300,000-400,000/ton ($13-17/ton) hike in locally held homo-PP cargoes after achieving satisfactory export sales to China in recent days. “Market is still slow here, but we think the hike is necessary. The combined effect of strong upstream costs, tight availability and healthy demand in the nearby China market is generating a strong upward pressure. We expect buyers to gradually accept the new prices,” a trader said.  

Polyethylene (PE)

In contrast to the PP market, Southeast Asian PE sector is rather calm. The continuous falling in ethylene costs is hitting sentiment hard and buyers tend to take a more cautious approach at the moment. 

“We are still facing difficulty in attracting deals for HDPE film cargoes. Buyers mostly place bids at below the $1250/ton threshold. We have not decided on the final prices while planning to hold offers stable week-on-week as export-oriented converters are still having good demand for end products,” an international trade commented.