Asia Daily PP and PE Overview – 7 December 2018

CHINA

•        Import homo-PP inched higher on costs and exchange rate 
•        Sentiment is calmer, but overseas suppliers indicate higher PE offers 

Polypropylene (PP)

After a brief break from the firming trend, several international traders decided to lift import offers for homo-PP cargoes by $20/ton from earlier this week in conjunction with higher upstream propylene (C3) costs and appreciated Chinese Yuan against the US dollar.

“It is hard to find cargoes priced below the $1050/ton threshold now. In the meantime, buyers seem to loosen purchasing interest following the drop in local ground,” a trader commented. 

Polyethylene (PE)

The PE market in China is pretty calm mostly due to the fact that buyers have already replenished comfortable inventories. However, international suppliers continue to raise the intention to introduce small to medium hike on new prices in the coming week.

“We think the year-end stock clearance period is over. Suppliers are now free from sales pressure, yet we need to wait and see for the impact from the macro environment,” a source added.

In another report, a survey taking selected private warehouses in Northern, Eastern and Southern China into account found a good reduction in inventories week-on-week. The data suggested the overall stock in the sample warehouses fell 17% for LLDPE, 12% for LDPE, 9% for HDPE and 2% for PP.      

SOUTHEAST ASIA

•        Limited movement on the final trading day of the week 
•        PE market outlook in question as ethylene extended loses 

Polypropylene (PP)

Market is rather quiet on the final trading day of the week as all eyes are on the prospect of China-USA trade relations and OPEC+ meeting. A limited quantity of regular Saudi homo-PP yarn concluded at $1070/ton CIF, LC AS term while most other sellers are holding their positions.

“More movement might emerge next week. At the moment, we have no plan to introduce any major adjustment,” an international trader informed.   

Polyethylene (PE)

Overseas sellers are not deflated by the plunging ethylene costs. Most sellers are adopting a very firm stance on the offers, some even stop taking orders with the intention to implement small to moderate increases in the coming week.

There have been reports that deals for regular Saudi LLDPE film were concluded smoothly in Vietnam at $1030/ton FCA term and $1020/ton CIF term. “We were informed that prices would firm up, but we just prefer to be cautious,” a buyer added. 

Local Indonesia market firm up slightly compared to the beginning of the week due to the exchange rate issues. However, buyers here have already stocked up and showing limited respond to the changes.