Asia Daily PP and PE Overview 10 October 2018

CHINA 

• Local market await discount after futures trading loses momentum 
• Import homo-PP sees additional gains 

Polypropylene (PP)

Import homo-PP market continues to move higher. Additional hikes are observed in import homo-PP market that sends Southeast Asian cargoes to $1315-1340/ton, a $15-20/ton higher than the beginning of the week while Saudi Arabia cargoes reach $1260-1270/ton, up $10-20/ton.

Acceptance for the latest price list has decreased, but not significantly. Chinese buyers said that with the CNY450-600/ton ($65-87/ton) surge in the local spot offers compared to 28 September; the current import offers remain competitive.

Polyethylene (PE)

Import HDPE film offers for Middle Eastern origin drop to the range $1280-1290/ton CFR China, LC AS term as demand remains sluggish for cargoes priced above the $1300/ton threshold. The trade war impact might show more effect by the end of the year, sources said, citing that many converters have large exposure to the USA market are not receiving new orders now.

“We export 40% of our end products to the USA. We have been trying to resolve the 25% import duties with customers, however, have not reached any consensus. All orders have been canceled and we are working to find a new market,” a packaging converter informed. 

SOUTHEAST ASIA 

• Market focus goes back to local grounds as import market lacks new offers 
• Trader withdraw PP offers in local Vietnam; Indonesia short of film, thermoforming grades 

Polypropylene (PP)

There are very limited new offers for import homo-PP in Southeast Asia despite market is already at mid of the week. Discussing with CommoPlast, several international suppliers informed about the intention to skip new offers to the region this round after the healthy sales result in China.

For the same reason, a couple of major local traders in Vietnam decided to withdraw offers to domestic buyers after introducing VND300,000-400,000/ton ($13-17/ton) hike earlier this week. Buyers are slack to respond to the movement, however, the general consensus is that the positive effect from the strong demand in China shall start to take place.

In Indonesia, there have been reports that supply for PP thermoforming and film grades is rather tight at the moment, which support the firm price levels. “Demand is healthy just that buyers are avoiding the exchange rate risk by turning to the local market for quantity,” a local producer said.

Polyethylene (PE)

Similar to the PP market, import PE sees very limited new offers. However, regional buyers are not as confident about the near-term outlook as they do for the PP sector with the primary concern laying on the low ethylene costs. 

Attempt to lift import offers from overseas sellers earlier this week has not generated satisfactory sales outcome, sources said. “We purchased Saudi LLDPE film at $1130-1140/ton CIF Vietnam, LC AS. The local HDPE film market is not very strong, therefore, we prefer to wait for a while,” a local trader informed.