A Chinese trader opined to SSESSMENTS.COM that the possibility of re-escalate tension between China and the US puts a shadow on PE, PP purchasing activity for July shipment. Compared to last month, July shipment offers for PE and PP from a Malaysian producer surfaced with an upward adjustment of between $30-50/ton. For PP Homo Injection, the offers stand at $950-960/ton on LC at sight, CIF China Main Port basis. While for PP Homo Film and LDPE Film, the offers stand around $930-950/ton-level, but the trader could not remember the exact level. Buyers’ response is rather cold as the offers are deemed too high. The trader opined that the producer might not focus on selling the cargoes to China market as the demand in Malaysia and Vietnam market is considered satisfactory. Regarding the cancellation of HDPE orders from a US producer, the trader commented that the producer is mostly dealing with one or two big traders in China. Although HDPE orders have been cancelled by the US producer, the sister company in South Africa is aggressively selling PP and LDPE cargoes for the last two months.
For the outlook, most July shipment offers are expected to come out within this week or early next week and the offers are expected to increase as monomer prices remain strong. However, the trader is unsure if Chinese buyers will purchase a lot of materials for July shipment as the production rate from downstream factories maintains low. Moreover, the finished product orders from the export market are yet to pick up. “Especially from the US market, there is a possibility for US customers to submit orders to Southeast Asia manufacturers instead of China due to the growing concern of US-China tension to re-escalate,” the trader added to SSESSMENTS.COM.
