ICIS Reports (19 May 2020)

ICIS Reports (19 May 2020)

19/05/2020 Share
ICIS Reports (19 May 2020)

Asia Pacific & China Market

Polyethylene

China’s polyethylene (PE) import prices were mixed as softer domestic prices dampened market sentiment. Domestic producers encountered increased sales pressure from higher inventories and lowered offers to stimulate buying interest. Southeast Asia’s PE import prices were largely stable to firm with gains in LLDPE and HDPE prices supported by the easing of virus control restrictions in some countries in the region. Demand for certain applications improved marginally and some buyers who had a backlog of orders were closing deals at slightly firmer prices to meet the uptick in demand. Suppliers were also having limited spot supply and were reluctant to reduce offers much because of that.

Overview:

• China import prices mixed, weighed down by domestic prices

• SE Asia sentiment demand improves for certain applications

• PE import supply to SE Asia showing tightness, supporting prices

Outlook:

• Uncertainty over whether rebound can sustain

• SE Asia market likely to eye China, ethylene trend for leads

• China demand expected flat through the rest of May

• Import supply may increase but domestic supply may reduce due to plant maintenance

• Demand expected flat through the rest of May

 

Polypropylene
The Chinese import market saw little movement this week, as overseas suppliers maintained offers in line with bullish feedstock propylene. Weak demand offset tight local supply and resulted in stagnated local market. This in turn weakened trading activities in the import sector. Prices hikes in southeast Asia gained further traction, as suppliers independently hiked offers amid the lack of inventory pressures. However, spot availability is likely to only be temporarily tight, given that the market is in between May and June offer cycles.

Demand for injection and block copolymer remains the weakest among the grades.

Overview:

• Chinese market stagnant on stable local prices

• Price hikes in SE Asia gain traction

• Injection, block demand among the weakest

Outlook:

• Local supply in China to tighten on outages

• Buyers stick to as-needed purchases

• Talks to transit to June shipment cargoes

 

 

 

 

Middle East/South Asia

Polyethylene

Southeast (SE) Asia polyethylene (PE) domestic markets were mostly stable to soft this week despite several countries in the region having eased restrictions imposed to control the coronavirus spread. Demand was deemed to be showing some improvement and some regional suppliers were poised to raise their offer prices. But buyers were still reluctant to accept price hikes because of a generally cautious environment and with economic growth expectations remaining soft.

 

Overview:

• Domestic prices mostly stable to soft as restrictions eased

• SE Asia downstream demand showing only small recovery

• Sentiment cautious amid wariness over China rebound

 

 

 

Europe

 

Polyethylene

European polyethylene (PE) prices are balanced this week, as the market finds balance and a potential bottom level for pricing. Sentiment has begun to shift, with players predicting that prices have bottomed out as crude and naphtha prices strengthen. Easing of lockdown measures across the continent are also fuelling belief that prices are likely to increase in the near future. This is yet to lead to any significant increase in demand, but most sources noted an increase in inquiries or a willingness to pay toward the upper end of current ranges.  

 

Overview:

• Market finds balance

• Sentiment begins to shift

• Players believe bottom of pricing has been reached

 

Outlook:

• Prices not expected to fall much further

• Easing of lockdowns could see gradual improvement in demand

• Still some worries over volatility of crude and fragility of demand

 

Turkey

 

Polyethylene

 

Higher offers for polyethylene (PE) into Turkey were heard this week. Sentiment has shifted this week. Buyers appear to be anticipating that current price levels have hit the bottom and some are purchasing now before expected hikes in June offers. Sellers are responding to this and also due to anticipation that prices will be affected by the improving price of crude oil. Demand has improved, although it is unclear if this is sustainable in the medium to long term. The lira has stabilised around TL7:$1 , following perilous falls in value last week, which may give confidence to buyers. The Turkey/Iran border has once again been closed, ahead of Eid ul-Fitr, which begins on 23 May. It is expected to reopen again following the end of the religious holiday.

Overview:

• Higher priced offers heard from all origins

• Demand improves

• Turkey/Iran border closed again

 

Outlook:

• Change in sentiment may affect June offers

• Demand expected to improve in June as Ramadan comes to a close

 

Polypropylene

Turkish polypropylene (PP) prices are mostly stable this week but suppliers from most origins have increased their offer prices. Sentiment has improved and enquiries have increased. Buyers are expecting current price levels to be the lowest of the current downtrend. They are therefore looking to secure material before the new offers are made for June. Increasing crude oil prices are also likely to play into June offers. The Turkey/Iran border has once again been closed, ahead of Eid ul-Fitr, which begins on 23 May. It is expected to reopen following the end of the religious holiday.

 

Outlook:

• Demand may be temporarily boosted by pre-buying

• Availability could shorten if China becomes attractive destination