Asia Daily PP and PE Overview 10 June 2016

In China, there are no trading activities today as players are away for the Dragon Boat Festival.

In Southeast Asia, sentiment remain strong on the last trading day of the week with Vietnamese buyers reported seeing no import homo-PP offers below $980/ton threshold. A buyer in the country received Indian homo-PP at $995/ton CIF Vietnam, LC AS term, some $10/ton higher than beginning of the week, said, “Most of our suppliers have sold out their allocation for this week. We expecting import homo-PP to Vietnam to hit above $1000/ton threshold in the coming days, and at this level, we might consider to purchase only small cargoes. Demand for our end product is regular at the moment.”

Buyers in Indonesia meanwhile also showed interest to replenish material considering couple of shutdown in the country after the Ramadan holidays and general firmer trend in the region. Several converters told CommoPlast on Friday they have stocked up sufficient cargoes to sustain production till August 2016, and temporary withdraw from the market to monitor further development. Malaysia market in contrast, exhibits a more cautious stance as players are evaluating the sustainability of the current trend. A market source added, “We remain cautious as demand in Malaysia might only pick up in July. Demand in local market is not strong at the moment, yet we hope sustained firming energy values can cushion higher prices in the near term.”

Regional PE market appears to be calmer than PP trade since most suppliers have technically sold out June allocation and are currently discussing about July shipment. A regional buyer procured Thailand LDPE film at $1140-1150/ton CIF Vietnam, LC AS term reported, “Domestic market has yet to see any major improvement, hence we are monitoring further development to gauge the likely market direction in the coming month before making another purchase.”

Demand elsewhere in the region is reported to be slower than usual due to the fasting month in Muslim countries and the monsoon season in others. A Philippines trader said, “We are not expecting any drastic movement in term of prices this month as the local market enter the traditional slow season. Buyers are leaving their desks for the National Days, leaving trading activities at lethargic stage.”