Market sources reported to SSESSMENTS.COM that Thai producers’ offers for PP Homo Raffia cargoes to China and Southeast Asia showed a remarkable gap. This week, offers for PP Homo Raffia from Thai producers to the China market captured at and above $800/ton level whereas in Southeast Asia market, the offers for Thai origin range between $750-770/ton on LC at sight, CIF basis. When compared to other offers for the same material of Southeast Asian origins namely Vietnam and Malaysia, offers for Thai cargoes are on the high-end of the price range. Market participants claimed that the Thai producers' decisions are supported by the uptrend in PP spot and futures market. September 2020 PP futures price on Dalian Commodity Exchange surged by more than CNY1,000/ton ($141/ton) from early April. Week over week, local PP Homo Raffia offers in China spot market up by around CNY150-500/ton ($21-70/ton). In 2019, China imported 378,640 tons of PP from Thailand. South Korea, Singapore, Saudi, United Arab Emirates and Thailand were the top 5 suppliers of PP to China in the previous year.
Unlike China, the offers for PP Homo Raffia of Thai origin to the Southeast Asia market captured on a downtrend as the overall market in the region is still haunted by the Coronavirus pandemic. As noted by SSESSMENTS.COM, the offers for Thai PP Homo Raffia to Vietnam went down between $10-20/ton on a weekly comparison. Despite the price cut, buyers’ bids for the cargoes are even lower, mostly submitted at $720/ton-level, or $30/ton lower than the initial offer levels. However, as the suppliers are unwilling to sell at such a level, the bids were rejected, and deals eventually concluded at the initial offer level, at $750/ton. All offers are on LC at sight, CIF Vietnam Main Port basis.
The majority of market players in Southeast Asia remain hesitant and halt procurement as they think the uptrend in China would be short-lived. Some cited sufficient inventory on hand, slow sales of end-products, market uncertainties as well as expectation of lower prices are the reasons to stay on the sidelines. Additionally, as triggered by the slow end-products sales, some converters are reducing their operating rate by 30-40% from the normal output while small factories in Vietnam halted production amid social restriction in the country. On the other hand, owing to the uptrend in China, some customers in Thailand are more willing in making procurement this week, SSESSMENTS.COM was told.
September 2020 Futures Price on Dalian Commodity Exchange (DCE) for April
| Date | Dalian PP Futures Settlement (CNY/ton) |
|---|
| 1-Apr-2020 | 5,803 |
| 2-Apr-2020 | 6,006 |
| 3-Apr-2020 | 6,247 |
| 7-Apr-2020 | 6,569 |
| 8-Apr-2020 | 6,598 |
Comparison of Thai PP producers’ offers with other Southeast Asian producers on LC at sight, China main ports basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Delivery Term |
|---|
| Malaysia | PP Homo Raffia | Offer Received | 800 | CIF |
| Malaysia | PP Homo Raffia | Sold | 800 | CIF |
| Thailand | PP Homo Raffia | Offer Received | 820-860 | CIF |
| Thailand | PP Homo Raffia | Buy Idea | 800 | CIF |
| Vietnam | PP Homo Raffia | Offer Received | 810-825 | CFR |
Transactions of import PP Homo Raffia on LC at sight
| Origin | Product | Transaction Type | Offers (USD/ton) | Delivery Country |
|---|
| Thailand | PP Homo Raffia | Offer Received | 820-860 | China |
| Thailand | PP Homo Raffia | Buy Idea | 800 | China |
| Thailand | PP Homo Raffia | Bid Given | 720 | Vietnam |
| Thailand | PP Homo Raffia | Bid Received | 750 | Vietnam |
| Thailand | PP Homo Raffia | Offer Given | 770 | Vietnam |
| Thailand | PP Homo Raffia | Offer Received | 750 | Vietnam |
| Thailand | PP Homo Raffia | Purchased | 750 | Vietnam |
| Thailand | PP Homo Raffia | Sold | 770 | Vietnam |
Tags: Asia Pacific,China,English,NEA,News,PP,SEA
Published on April 9, 2020 7:03 PM (GMT+8)
Last Updated on April 10, 2020 9:13 AM (GMT+8)
