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After hitting the bottom during the final week of March, import homo-PP to Southeast Asia market has steadily firmed up for nine weeks in a row, sending prices above the previous high. CommoPlast Price Index indicates an increase of nearly $80/ton on an average compared to late March despite some volatility along the road.

This week, the market starts stagnating and several makers adopt a softer stance on the cargoes, as stiff buyer resistance give no further way for prices to firm up. A major Saudi Arabia producer agreed to step back on homo-PP offers to Vietnam by $20/ton from initial price list after a weeklong of hard negotiation. Deals have been achieved at $1300/ton CIF, LC AS; however, there is only 300 tons allocation available this time.

Vietnamese buyers also reported receiving $5/ton softer on Thailand homo-PP cargoes compared to last week to $1325/ton CIF, LC AS term. “We have made some purchases earlier and therefore, have no plan to replenish additional quantity at the moment. We think the market has reached the peak and suppliers are facing tremendous difficulties in implementing further hike. There is a possibility that prices might come to correction in the coming month,” a converter said.

In the meantime, Indonesian buyers repeatedly emphasized on the inability to accept dutiable cargoes above the $1300/ton threshold citing more competitive local prices and limited improvement on end-product demand. 

“Sales to Indonesia have been weak and we are diverting the allocation to Vietnam, where buyers acceptance is slightly better. The market here is entering the holiday mood, making the near-term outlook less optimistic,” an international trader reported having sold Saudi homo-PP at $1305/ton CIF Indonesia, LC AS term.

There is a wide conjecture that import PP market has reached the peak and likely to face some minor correction after the Ramadan holidays. Supply-wise, Southeast Asia players might expect Vietnam’s Nghi Son Refinery & Petrochemical to bring its 370,000 tons/year PP unit online in the near-term as all trial tests have been completed. In the same time, Lotte Chemical Titan is planning to start up the new 200,000 tons/year PP plant within June, which boost the company’s total PP output to 500,000 tons/year.

“We are monitoring the demand condition in other international markets including India and South Africa to better gauge in the near-term outlook. The ongoing monsoon season in these markets might affect demand to a certain extent and possibly pressure overseas sellers,” a regional buyer added.

Demand for dutiable homo-PP cargoes at above the $1300/ton threshold, except for specific grade, has generally entered the gridlock condition. On the other side of the market, most Middle Eastern producers are claiming limited supply, which consistently provides support for the firming trend over the past months. While the tug-of-war is intense, would prices be able to firm up any further, it depends heavily on buyer’s need to make replenishment and its ability to adopt alternative materials. “For our side, we have more flexibility than others and therefore, we have been sourcing Thailand cargoes at relatively competitive levels taking import duties into account,” a Vietnamese buyer informed.