Asian PP, PE players discuss market state after US rate hike

Players in China and Southeast Asia report that the PP and PE markets have become quiet following the US Fed’s decision to raise interest rates since buyers who were already complaining about rapid increases retreated to the sidelines in order to monitor developments.

“This is not good news for regional currencies as the USD parity will increase further now and hamper buying appetite for import cargoes,” a buyer in Malaysia opined.

The decision was followed by a softening in crude oil prices which pushed LLDPE and PP futures downward a bit. On December 15 and 16, May futures prices on the Dalian Commodity Exchange witnessed cumulative decreases of $28/ton for LLDPE and $13/ton for PP.

A few players in China’s PE and PP markets stated, “Although PE and PP prices remain on a firm note, sentiment might be hampered if the Fed’s impact on crude oil prices lasts longer.”

A source from a Southeast Asian PE producer noted, “The market has become quiet after the news of the Fed’s decision as purchases ceased on the buyers’ side. However, we still expect PE prices in China to maintain a firm note until the end of December as supplies are likely to remain limited until the arrival of deep sea cargoes at the end of the year.”