Import homo-PP hit multi years high level across Asia

The Asian homo-PP market opens the first trading week of the year on firmer notes thanks to solid support from surging propylene costs and steady recover in energy complex. Data from CommoPlast Price Index showed an increased of $20-25/ton on an average compared to the pre-holiday week, bringing latest prices to the highest level seen since beginning of 2016.  

Propylene costs based on FOB South Korea term gain approximate $65/ton since beginning of December 2017 thanks to tightening supply stemming from a series of cracker shutdown and healthy demand from Chinese buyers. Propylene is expected to strengthen up further, industry experts said, which cushion the current trend in the downstream PP market.

A Saudi Arabia producer lifted homo-PP offers to Vietnam by as much as $30/ton compared to the concluded levels before the holidays, reaching $1200/ton CIF, LC AS term. Deals have been recorded with no additional discount. “We do not have much quantity, hence only can provide small allocation to regular buyers,” a distributor said.

Vietnamese players are speculating that import homo-PP from dutiable origins might hit above the $1200/ton threshold in days and that buyers might gradually accept the hike if the trend persist. The concern is on the outlook in the post-Lunar New Year term.

In China, Saudi Arabia’s homo-PP cargoes have been dealt at $1180/ton, CFR China, LC 90 days term earlier this week, though the buying interest is not very great. Some non-dutiable cargoes emerged at $1240/ton CFR China, LC AS term and a buyer commented, “This level is very similar to domestic offers at the moment, hence we are not very interested.”