Initial Mid-Eastern PP, PE offers for June diverge in China, Southeast Asia

Mid-Eastern producers have started to reveal June PP and PE offers to Asian markets, as per ChemOrbis. Most of the offers made to Southeast Asia so far call for modest increases owing to tight supplies whereas initial offers to China indicate stable to lower prices for cargoes to be shipped next month. A source from the Middle Eastern producer who rolled over homo PP and LDPE offers to China said, “The market sentiment has not improved at all and we are unable to raise our prices due to subdued demand. As our allocation is limited, we are not considering a decrease. However, we don’t think that we will be able to make smooth sales this month as we are not so optimistic about the outlook.” Indeed, another Middle Eastern PE producer also started to offer to China with a slight discount of US$10/ton for LLDPE and HDPE. Nevertheless, the same producer reported raising LLDPE and HDPE offers to Southeast Asia by US$10-20/ton for June. A company source admits facing resistance from their customers. “However, our supply remains tight while other Middle Eastern suppliers also have very limited quotas this month. Therefore, we feel buyers in Southeast Asia have no choice but to purchase at the new levels,” he said. Commenting on the different paths prices have taken in the two regions a market player commented, “They must be aiming to prop up the market sentiment with price hike announcements to Southeast Asia.” A Middle Eastern producer lifted LDPE and LLDPE offers by US$30/ton to the Southeast Asian region. “We have just finished a maintenance shutdown at our plant and therefore, our supply level is still not that high particularly for LLDPE. However, I have to admit that we are facing a bit of a pressure for LDPE film sales as supply remains sufficient in the Southeast Asian market for this product,” a company source said. Buyers and distributors in Indonesia, Vietnam and Malaysia also reported receiving US$10-20/ton higher homo PP, LLDPE and HDPE offers from a Saudi producer. “We heard that the producer is experiencing some production issues for PE and therefore, they are offering reduced tonnages this month. We are not able to risk buying much for now as the outlook is not clear. Demand is basically slower in China, where buyers are indifferent to new purchases,” a trader in Vietnam commented. He also said, “Buyers and sellers are now playing a tug of war. Whoever holds and pulls stronger will win and set the market trend.” According to ChemOrbis, a Saudi PP producer’s June offers to Southeast Asia have also been revealed with rollovers to $10/ton hikes. “We are receiving lower bids and we may be willing to give some discounts only for large volumes to regular customers. Although we are not facing much sales pressure, we have to acknowledge that it is really hard for prices to rise further when demand remains lethargic. We expect to see a stable trend,” the producer’s distributor commented.