Asia Daily PP and PE Overview 24 October 2018

CHINA

• Overseas makers stepped back on PP, PE offers to conclude deals 
• Buyers purchase hand-to-mouth as prices drop

Polypropylene (PP)

In the wake of the softening trend in the domestic ground, more international sellers started giving more discount on import homo-PP cargoes to China. In fact, deals for Saudi Arabia and Indian homo-PP yarn are concluded at $1220/ton CFR China, LC AS term, underlining a drop of $40/ton compared to the second week of October.

“The recent correction on Dalian Commodity Exchange affected the sentiment in the spot ground, which has been constantly declining over the past several trading days. Import market would only regain the momentum if local ground recovers from the on-going slide,” a Chinese buyer said.

Polyethylene (PE)

Thailand producer also steps back on HDPE prices by $25/ton from the initial price list to close the transaction at $1310/ton CFR China for the film grade. The maker also offers $15/ton reduction on LDPE film to deal at $1145/ton with the same term.

Chinese buyers are seeing more room for reduction in the near term, and therefore, tend to hold back on the purchases despite having stable end product demand. In an interesting note, import HDPE film to China has been traded at a premium over the Vietnam market for more than a month now.

SOUTHEAST ASIA 

• Saudi PE concluded with larger discount in Indonesia, Vietnam 
• Import homo-PP seems to soften slightly 

Polypropylene (PP)

A major Saudi Arabia producer has loosened stance on the import homo-PP cargoes to Vietnam and agreed to conclude deals at $10/ton reduction from last week, at $1250/ton CIF, LC AS term for both yarn and injection grades. This could be the early sign of a correction following the weaker demand in the near-by China market and the drop in the upstream propylene market.

“The available quantity is small, and therefore we decided to proceed with the purchases. With the current market condition, it is hard for suppliers to maintain a firm stance on the cargoes,” a converter commented.

Polyethylene (PE)

In Vietnam, a major Saudi Arabia producer conceded to $30/ton discount on both HDPE and LLDPE film to close deals at $1230/ton and $1090-1100/ton respectively. The discount is much in line with the market expectation considering the recent plunge in ethylene prices; however, it also acts as a benchmark for negotiation with other suppliers.

In Indonesia, local suppliers are racing to cut local LLDPE film price following the heavy influx of Indian and USA cargoes. Buyers here are expecting supply for this grade to be more comfortable in the coming month as both domestic producers plan to resume production.