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NewsSSESSMENTS: China’s Polyolefins Price Movement On Full Swing, Supported By Surge In Stock Market


As SSESSMENTS.COM noted, China’s polyolefins price movement is on full swing as supported by the surge in the stock market. Since the beginning of the month, September 2020 LLDPE and PP futures on the Dalian Commodity Exchange have shown some gradual upward movements day by day. Chinese players stated that the reason behind the rebound is mainly caused by the skyrocketed stock market and trading volume that hit a five-year high. Aside from that, some others also assumed that the firmer futures prices are associated with the capital injection and the maintenance season at several giant plants in the country during July. Utilizing the momentum, most Chinese sellers decided to adjust up their offers for both PE and PP cargoes in the local market. 

For PE, a Chinese producer reported raising their offers for local LLDPE Film C4 cargoes between CNY100-150/ton ($14-21/ton). From the trader's end, offers for local and localized Middle Eastern PE cargoes across different grades generally increased between CNY50-150/ton ($7-14/ton). All compared to last week’s level. Likewise, local offers for HDPE Film, LDPE Film and LLDPE Film C4 from another Chinese trader also moved higher between CNY100-200/ton ($14-28/ton) on a daily comparison. For PP, a trader adjusted up the offers for local PP Homo Raffia between CNY100-200/ton ($14-28/ton) on day-on-day comparison. In the meantime, a Chinese producer decided to maintain a stable offer level for PP Homo Raffia to the local market. Not only supported by the firmer futures prices, most sellers including producers and traders also gained encouragement from limited supply in the domestic market, SSESSMENTS.COM was told. 

In the import market, the current offers to the China market this week also established at a high-level, particularly for PE cargoes. At the moment, the most noticeable high prices are coming from a Thai PE producer; with offers to the China market at above $1,000/ton-level for a particular grade. This week, SSESSMENTS.COM was notified that the Thai PE producer is offering HDPE Film cargoes at $1,015/ton, no comparison available since the producer skipped offering to the China market last week. However, compared to the price level a month ago, the producer’s offers surged $155/ton. For other grades, the producer’s offers for LLDPE Film C4 captured at $910/ton, or $40/ton higher than last week’s level. All offers are available on LC at sight, CIF China Main Port basis and the shipment will be in early August. Behind the high prices, the producer’s source cited the low inventory level in the China market as a support system. 

Responding to the offers, Chinese buyers are unimpressed and are objecting to the high prices, as told to SSESSMENTS.COM. Most of them are reluctant in taking the cargoes and prefer to wait on the sidelines. However, buyers perceive that they somewhat have no choice but to procure for production needs since PE and PP prices are expected to move further up in the upcoming weeks.

Local PE, PP offers on cash, EXW China basis (including 13% in CNY term and excluding VAT in USD term)

OriginProductTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaHDPE FilmOffer Given8,200-8,4001,033-1,059
Middle EastHDPE FilmOffer Given8,300-8,3501,046-1,053
ChinaLDPE FilmOffer Given8,550-9,0001,077-1,134
Middle EastLDPE FilmOffer Given8,600-8,7001,084-1,097
ChinaLLDPE Film C4Offer Given7,200-7,600907-958
Middle EastLLDPE Film C4Offer Given7,300-7,400920-933
ChinaPP Homo RaffiaOffer Given8,075-8,5001,018-1,071

Import PE offers on LC at sight, CIF China Main Port basis

OriginProductTransaction Type*Offers (USD/ton)
ThailandHDPE FilmOffer Given1,015
ThailandHDPE FilmOffer Received1,015
ThailandHDPE FilmPurchased1,010-1,015
ThailandLLDPE Film C4Offer Given910
ThailandLLDPE Film C4Offer Received910
ThailandLLDPE Film C4Purchased910
Description: *Early August shipment

September 2020 Futures Price Settlement on Dalian Commodity Exchange (DCE) between July 1-8

DateDalian LLDPE Settlement (CNY/ton)Changes From Previous Day (CNY/ton)
2-July-20206,875No Changes

September 2020 Futures Price Settlement on Dalian Commodity Exchange (DCE) between July 1-8

DateDalian PP Settlement (CNY/ton)Changes From Previous Day (CNY/ton)

Tags: Asia Pacific,China,English,NEA,News,PE,PP

Published on July 8, 2020 6:59 PM (GMT+8)
Last Updated on July 8, 2020 6:59 PM (GMT+8)