Asia Daily PP PE Report 25 Jan 2016

In China, futures prices on Dalian Commodity Exchange for May delivery close at stable level compared to the last trading session for PP while LLDPE futures soften CNY45/t ($7/t). Contract number 1605 settled at CNY5976/t ($775/t without VAT) for PP and at CNY8195/t ($1065/t without VAT) for LLPDE.

Physical spot offers for both PP and PE in local market remain unchanged from last week while sentiment has been softer, according to players. A trader in Xiamen said, “We received more enquiries from local buyers today as they wish to check on offers after energy market posted an impressive gain late last week. However, we couldn’t manage to conclude any deal.”

Another trader in Shanhai added, “More of our customers are off for Chinese New Year now and we expect quieter market sentiment in the coming days. The PP market is having strong support from firm monomer cost but the number of deals concluded is rather disappointed.” Players also reported that the number of LLDPE film offer in the market today is rather minimal which is believed to be a result of tight supply in both local and import market.

In Southeast Asia market, couple of major PE makers in the region has adjusted their offers slightly down compared to last week in the face of weaker demand and upstream costs. A Thai maker reduced their HDPE prices by $5/t to reach $1105/t CIF Vietnam, LC AS term. Meanwhile, a Malaysian producer has also adjusted their LDPE price to $1100/t CIF Vietnam, term. A buyer commented, “Supply for LLDPE film in local market is low at the moment and we purchased some Middle East cargoes at $1060/t CIF Vietnam. The market is too volatile recently, hence we plan not to buy in large quantity.” Another producer in the region also informed that they have very limited quantity of LLDPE film to offer to the market.

In the PP market, most suppliers have yet to announce new offers for this week, however, players are not expecting any drastic movement considering the firm propylene costs. Players in Indonesia are complaining about weak demand condition in local market with one trader commented, “Buyers are not in the position to replenish material and we are offering larger discount to entice demand now.”

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