Saudi maker cuts homo-PP hike target to China as resistance built up

In the previous trading day, a major Saudi Arabia producer announced fresh PP and PE prices to China with $90/ton hike compared to late August, bring homo-PP prices to $1190-1210/ton, CFR China, LC AS term. Buyers resisted strongly, resulted in disappointed sales results.

Weakening futures market caused slower sentiment in the spot trading, encouraging buyers to take wait and see position, hoping to see some discount in the near term. To smoothen sales process, the Saudi Arabia producer reportedly offer up to $50/ton discount to close deals at $1160-1170/ton CFR China, LC 90 days term for the cargoes.

A trader sold the parcel said, “We have regular allocation this month and it seems that buyers are paying more attention to local ground this week, following the down trend in futures trading. As a result, it is more difficult to attract sales, in spite of the strengthened Chinese Yuan.”

Another trader is willing to close deal at $1160/ton CFR China, LC 90 days term for larger quantity added, “It become harder to attract sales this week. We think market has reached the peak and need some minor adjustment to bring buyers back. However, we are not seeing any possibility of large reduction considering the current supply tightness condition.”

The producer has not implemented any adjustment on the PE cargoes.