South East Asia’s PP market tracks propylene higher

PP prices in Southeast Asia moved higher in the first week after the Chinese New Year holidays, tracking the upward movement in propylene feedstock prices, as per Chemorbis. While sellers are finding support for their price hikes from higher costs as well as limited supply, buyers have mostly remained in the sidelines, with many buyers having secured some material before the holidays in anticipation of producers attempt to raise prices post-holidays. Other converters wait in a bid to get a better idea of the direction of China’s PP market post-holidays that awaits trading activity to pick up. A Chinese producer has lifted PP offers by CNY100/ton (US$15/ton) at the start of the week based on firmer PP futures prices as well as expectations that demand would begin to pick up over the near term as more buyers are expected to return to the market over the next two weeks after their extended holiday breaks. Meanwhile, traders reported that they are also feeling more optimistic about their prospects for the coming weeks given limited availability inside Asia as well as their expectations of seeing better demand from Chinese converters over the short term. In Southeast Asia, import offers for homo-PP injection and raffia currently stand US$40-70/ton higher than the levels reported just before the holidays. Producers offering towards the lower end of the range reported that they are planning to lift their offers over the near term as they expect to see better buying interest in the coming days. Prices are also moving higher in the region’s local markets post-holidays. A producer in Indonesia announced a price increase of US$60-70/ton on homo-PP offers this week, pointing to ongoing supply concerns within the country as well as higher propylene feedstock prices as support for their price hike targets. A distributor in Malaysia reported that they have finished the last of their February allocation at prices equal to their pre-holiday offer levels this week, with the distributor adding that they expect their suppliers to announce increases of around US$30-50/ton in the coming weeks. Distributors in Vietnam report that they have managed to conclude some deals for locally-held import cargoes at prices higher than their pre-holiday offer levels. Distributors predicted that local prices in Vietnam would remain firm over the near term based on rising import offers and limited availability. Distributors in Thailand also reported lifting their offers by around THB1000/ton (US$33/ton) after the holidays, with a few converters in the country saying that they purchased some material at these new prices out of fears of further price increases over the near future.
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