ICIS Reports (26 May 2020)

ICIS Reports (26 May 2020)

26/05/2020 Share
ICIS Reports (26 May 2020)

Asia Pacific & China Market

Polyethylene

China’s polyethylene (PE) import prices were mostly higher in the week, driven mainly by overseas suppliers’ moves to increase offers, tracking firmer domestic prices. Southeast Asia’s PE import prices were mostly stable after finding a foothold following sharp declines in April. Demand for certain PE applications has shown mild improvement, supported by the easing of virus control restrictions in some regions. But not all buyers were yet convinced that the improvement could be sustained over coming months. There were limited offers this week ahead of the Eid ul-Fitr holidays in parts of southeast Asia but overall spot supply especially from the Middle East was also believed to be very short.

Overview:

• China import prices mostly firmer on higher offers

• SE Asia demand improves for some users, but not all buyers agree

• PE import prices supported by tight spot availability

Outlook:

• Market still not fully convinced that rebound is sustainable

• More offers expected over the next week

• SE Asia market will focus on China, ethylene prices for clues

Polypropylene
The Chinese polypropylene (PP) prices gained further ground, finding support from strong upstream monomer values and cautious optimism that lockdown measures could gradually ease. This, together with the bullish sentiment on hopes for favourable policies emerging from the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) being held in Beijing, pushed up PP futures prices. Some suppliers released offers for June shipments early, keen to offload as much volume as possible before the start of the Eid holidays that could see demand thinning out in predominantly Muslim countries. Supply in southeast Asia was snug, with some suppliers purportedly having oversold to China in the previous weeks. Vietnam continues to see the strongest demand in the region.

Overview:

• Offers hiked on rising upstream values

• Vietnam sees strongest demand in SE Asia

• Bullish sentiment ahead of major policy meetings in China

Outlook:

• A rising share of yarn production in China

• Speculative buying could die down

• Demand could improve as restriction measures ease

 

 

 

Middle East/South Asia

Polyethylene Pipe Grade

Discussions in the polyethylene (PE) pipe markets in the Middle East were stable to soft, tracking residual May trades, against the backdrop of weak demand and ahead of June price announcements. Uptake across the region remains subdued, as regional governments have cut back infrastructure spending amid the pandemic, to divert funds towards healthcare to battle the raging coronavirus pandemic. The seasonal Ramadan lull and upcoming Eid ul-Fitr holiday have further curbed activity, affecting pipe purchasing. The Indian spot market also saw subdued activity owing to a further extension in the countrywide lockdown until 31 May. Domestic availability stayed sufficient, with most processing units continuing to operate at reduced rates during the lockdown.

Overview:

• Middle East in mid-month lull, demand stays weak

• Indian demand weak as lockdown extends

• Asian market recovery props seller sentiment

 

 

Europe

Polypropylene

Polypropylene (PP) prices in May have settled down, but the spread between monomer and polymer has widened, in many cases at freely negotiated accounts. Demand remains mixed: critical medical, hygiene and packaging applications are very strong, while sectors such as automotive and durables are weak. Sources expect this to improve a little on easing lockdown conditions. Stronger crude and naphtha prices are expected to affect June propylene monomer discussions next week. Net spot prices are low in Europe and at presentare not attracting much in the way of imports.

Overview:

• Demand application-driven

• June propylene contract imminent

• Crude and naphtha firmer

Outlook:

• June contract imminent

• Demand to remain mixed

• Mild improvement expected on easing lockdowns