Asian PP buyers head to the sidelines

In Asia, trading activity has fallen recently as the upcoming National Day holidays in China, along with the anticipated increase in supply levels; has led many buyers to conclude that they will be able to obtain some discounts on their purchase prices over the near term, as per Chemorbis. Some buyers in China reported that they are planning to shut their plants during the National Day holidays in late September and early October. Easing supply levels in Southeast Asia, where buyers in Muslim countries are slowly returning to their desks after the Ramadan holidays, weigh down further on the general sentiment, as does the weakness in Asia’s spot propylene market. Spot propylene prices in Asia posted a total decrease of $80/ton since the beginning of September. In China, a number of buyers preferred to stand out of the market due to their expectations that prices will retreat over the near term following the restart of some domestic plants as well as the start up of some new capacities. China’s Sinopec Tianjin Co. has restarted its 450,000 tpa PP plant in early September, following a few weeks of maintenance while China’s Shenhua Baotou is said to have started to supply near to prime homo-PP cargoes from their new 300,000 tpa PP plant for testing purposes after the recent start-up of their plant. In both China and in Southeast Asia, the homo-PP market tracked a mainly stable path week over week due to the lack of trading activity. Now, sellers, who are trying to keep their prices at current levels, are carefully monitoring the developments, with many distributors reporting their reluctance to purchase too much material as they do not have a clear idea about the direction of prices in the medium term. This week, a couple of producers from India and South Korea revealed their initial October prices to China with rollovers from their September done deal levels, while the offers that have been reported in the market have generated little interest. Traders in China and Southeast Asia were unwilling to concede to discounts on their prices in consideration of their high replenishment costs, while a Taiwanese producer offered a $20/ton discount on their September done deals this week due to strong resistance from buyers.
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