Asia Daily PP PE Report 20 Apr 2016

In China, futures prices on Dalian Commodity Exchange continue to dip lower today with contract number 1609 for PP slid CNY191/t ($30/t) to settle at CNY6665/t ($880/t without VAT). LLDPE futures have also settled at CNY75/t ($12/t) lower at CNY8240/t ($1089/t without VAT).

Sluggish demand in domestic market has contributed in another CNY100-200/t ($15-31/t) reduction in spot PP offers compared to yesterday while PE price list slashed CNY50-150/t ($8-23/t). Traders are complaining about inactive buyers amid accumulating domestic inventories.

A trader in Shanghai commented, “Prices are going down day by day pushing buyers to the side-line with expectation that the longer they hold their purchases the better deal they might get. Our regular buyers are not even interested in negotiation today. We wish to deplete our cargoes quicker therefore we plan to adjust our offers in accord to market condition.”

Import market sees no better condition and some forward selling activities have been spotted since traders are loosing confidence in the medium term outlook. A Guangdong based trader said, “We are not very optimistic about May-June outlook, therefore we are giving larger discount than market to push some PE cargoes to regular buyers now. We are very disappointed with sales these few days, and we think prices might continue journey south in the coming week.”

In Southeast Asia, market sentiment is getting slower as many players have left their desk for ChinaPlast exhibition; however, prices have retained the firm stance as sellers hold limited supply. A major Middle Eastern producer lifted LLDPE film offer to Vietnam by $30/t compared to last month at $1250-1260/t CIF term and claimed to have completed the booking quantity from customers. A buyer commented, “Our supplier has yet to conclude the price, however we only booked a small quantity to maintain relationship. Local prices are softening and we think we might not be able to breakeven on this cargo.” Regional buyers are generally expecting LLDPE film to sustain the current firm position in the near term given unstable production status at some major plants.

Meanwhile, HDPE sector is still on the weaker note compared to other grades as comfortable supply downplay on prices. A Thailand producer cut their HDPE offers by $10/t compared to last week earlier said, “Demand is so weak that we have yet to conclude many deal since offered. Our supply for HDPE is sufficient, and in addition to the widely available of re-export cargoes, we are not optimistic about the near term outlook.”

The PP market meanwhile see a mix sentiment with couple of sellers adjusted their offers down in the face of weaker buying interest while others are keeping it up with the firming trend. A Vietnamese trader received Indian homo-PP at $1080/t CIF term, some $30/t lower than last week while reporting received Middle Eastern cargoes at $1110/t with the same term. A trader source commented, “We feel these offers are a little too high. Local market has not seen further reduction this week yet domestic prices are still more competitive than import cargoes. Buying interest is weak and near term outlook is rather cloudy. We prefer to wait until after Labour Day before making further decision.”

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