Asia Pacific & China Market
China’s polyethylene (PE) import prices were stable to firm as recent gains slowed somewhat. There was limited spot availability from overseas suppliers due to high feedstock values and low operating rates. In southeast Asia, PE import prices were stable to firm, supported by increased offers from major suppliers to the region. Many Middle Eastern suppliers had limited spot availability and cited higher cost pressure from rising feedstock costs for their increased prices. Buying sentiment has shown some improvement with some downstream converters noting better orders, but still well below the period before lockdowns and virus control measures were imposed.
• China, SE Asia PE import prices stable to firm
• Recent gains showing signs of slowing amid buyer caution
• Limited spot supply still supportive, especially for HDPE
• China plants may start up after maintenance closures
• Expectations of more imports to arrive from July
• Southeast Asia market eyes lead from China demand
Polypropylene (PP) import prices in China registered further gains, while persistently low workable prices from buyers widened the buy-sell gap. Import suppliers further increased offers of forward-months cargoes, citing rising feedstock costs and demand recovery in other regions. Gains in southeast Asia were fuelled by tight supply, with spot availability for June shipments extremely limited. Most suppliers have sold out June shipment cargoes in the weeks before and hiked offers sharply following the absence of inventory pressures, turning southeast Asia into more of a seller’s market this week.
• Chinese values firm, buy-sell spread widens
• Gains in SE Asia fuelled by tight supply
• Non-woven demand in SE Asia slows
• Weak demand in China could off-set tight supply
• Demand in SE Asia may improve as lockdown measures ease
• Supply in June to remain tight, until July offers emerge
Middle East/South Asia
Prices of Middle East origin cargo were largely stable to firm as producers made separate offer hikes for June cargo. Most buyers succumbed to the offer levels. Some offers were increased further for buyers seeking additional volume amid the bullish sentiment, though these were hardly heard to have much success in the week. In Pakistan, buyers remained subject to supply tightness and replenished stock at stable to firm prices, though flat demand capped buying interest at prices above the assessment ranges. India domestic prices independently hiked further on the back of bullish sentiment from recent feedstock ethylene rebounds amid also increased import offers.
• Middle East offers firm
• Most buyers accept with some resistance
• Bullish sentiment boosts India domestic prices
Polypropylene (PP) prices have settled up, but have not reached the plus €60/tonne targeted by some producers. ICIS reflected the increase in the reported dated 5 June. Demand is strong for food packaging, health and medical applications and these sectors are expected to remain firm, if less so than in the past three months. There is ample supply, and automotive and appliances remain weak, with some upturn expected in appliances as countries come out of lockdown.
• PP settles below the propylene increase
• Demand mixed according to application
• Crude volatile
• Some upturn on easing restrictions expected
• Increased production could mean more imports
• Crude direction to remain focus
Turkish polyethylene (PE) prices have continued to follow their uptrend this week but there has been a noticeable slow in buying interest. Many players have been stocking up, since the end of May, as they anticipated prices rising in conjunction with the rising oil price. Supply levels have fallen, as producers have either reduced or eliminated their allocations to Turkey. Interest has shifted to China, as it offers more attractive
• Higher priced offers heard from all origins
• Demand improves
• Turkey/Iran border closed again
• Change in sentiment may affect June offers
• Demand expected to improve in June as Ramadan comes to a close