Overseas producers reveal lower April PP, PE prices to China

Overseas producers started to reveal new April prices to China with substantial decreases from March, as per ChemOrbis. Players already expected to see some price reductions for the following month since demand from converters has been restricted for some time owing to bearish sentiment in the country. Producers had adjusted their PP and PE offers down to China by mid-March in the midst of slumping ethylene and propylene costs compared to earlier this month, as well as, growing resistance from buyers. In the PP market, a trader based in Shantou reported receiving new PP offers from a Middle Eastern producer for April shipment cargos with sizeable decreases from the last levels for March shipments. “We received new homo PP raffia and injection prices with US$100/ton drops, while the producer reduced their PP block copolymer prices by US$100-110/ton,” the trader mentioned. “We haven’t purchased any volumes yet as we prefer to preserve our cautious attitude for the time being,” he added. The trader keeps his own prices steady at the moment but is open to give slight discounts. “We don’t have the confidence to lift our prices in the short term,” he said. On another note, an official distributor of another Middle Eastern producer reported selling some materials for end April shipment with small discounts from their initial prices this week. “PP prices will possibly follow a stable trend in the short term. It is hard to raise offers due to thin demand and trading activities,” a producer source said. A South East Asian producer lowered homo PP offers by US$100/ton for April shipments with respect to March. “Demand from China picked up now and is better compared to Southeast Asia,” a source at the producer commented. “We are not feeling any stock pressure since our supply was short for March. One of our PP lines was down last week and resumed operations recently, but it is sill yet to reach full running rates,” he continued. Prices may soften further albeit in smaller amounts of US$20-30/ton as the market remains soft and is set for gradual drops, according to him. For PE, a Middle Eastern producer reported approaching the market with decreases for next month. Also, a South East Asian producer revealed April PE prices with US$100-110/ton decreases from March. The producer is not offering LLDPE for now as they plan to gauge the possible impacts of ExxonMobil’s new offers from their site that will start up soon. “ExxonMobil will need around 2 months to reach the market level and to see at which rates they can run the plant while their prices will not be low,” a producer source stated. “Our HDPE supplies are very tight on the back of an ethylene shortage nowadays. We received some responses to our LDPE offers from China but the interest from Southeast Asia is low. We don’t expect prices to record large decreases in the days ahead but the LLDPE market may move down by around US$50/ton,” he added. ExxonMobil is set to start up its new PE plant in Singapore after bringing its new cracker online with an ethylene capacity of 1 million tons/year at the Singapore petrochemical complex in early January. The producer is now preparing to bring its new 1.3 mln tpa PE plant on stream in early April. The new capacity consists of one LLDPE plant and one HDPE/LLDPE swing plant, each with a capacity of 650,000 tpa. In Asian upstream markets, spot propylene costs lost around $30/ton on FOB South Korea basis during the first three weeks of March according to ChemOrbis. Spot ethylene prices declined US$135/ton on CFR Northeast Asia basis in the same period.