Strong upstream costs support firmer import homo-PP market in SEA

Couple of international and regional suppliers announced new import homo-PP to Southeast Asia with small increases of $5 to $20/ton from last week citing solid support from the strong energy complex and upstream propylene costs. Other factor cushioning the trend including the persistent supply tightness, yet very limited pull from demand side.

A regional trader introduced $5/ton hike on Middle Eastern homo-PP and $20/ton on Vietnamese cargoes to Indonesia, reaching $1155/ton and $1210/ton respectively, all based on CIF, LC AS term. Deals remain restricted, which the supplier highlights the fact that buyers have made sufficient replenishment in the previous weeks while restraining from purchasing dutiable cargoes. A buyer informed, “Our supplier insist on $1200/ton level for Vietnamese homo-PP, which is a little high compared to local material. We decided to skip buying this time.”

Middle Eastern homo-PP cargoes to Vietnam remain on the stable to firmer track. It appears that difficulties in attracting deals do not defer suppliers from keeping firm stance on the cargoes. “Our customers have yet to portray the interest in placing bids. We plan to give only $5/ton discount for serious customers since allocation is not high,” an international trader offer Saudi cargoes at $1175/ton CIF Vietnam, said.

Without much support from the demand side, room for further increment seems rather slim. Market is expecting to close deal at stable level from last week and might persist on the sideline until suppliers agree to discount.