A Chinese producer reveals that the market will find PE prices moving into another direction soon. A coal-based PE producer reveals to SSESSMENTS.COM that their company can hit the daily sales target. Their LLDPE Film C4 offer stands at CNY6,700-6,740/ton ($945-960/ton) on EXW China basis and including 13% VAT.
Fundamental demand now exists in the China PE market, SSESSMENTS.COM noted. However, the producer noticed that customers show stiff resistance towards high prices. For now, their company is following oil-based producers step to maintain firm prices as offers in the open market is still supported by lower local inventory and high monomer cost.
As the producer pointed out to SSESSMENTS.COM, at the moment there is a minimal chance for PE prices to settle lower. Several driving factors for the price to be firm, first of all, demand recovering after that was suppressed during the coronavirus pandemic, initially in China and from late May onwards in Southeast Asia and Europe. Secondly, new plants delayed start-up on average 2-3 months in China, with foreign plants taking longer time. Thirdly, while Middle Eastern producers centralized their maintenance on Q1, now coming into May-July, Chinese producers will also be starting turnaround maintenances. The producer shared their view that there are a lot of imported cargoes will be arriving in China market coming into July to September so the prices may fall soon and come into traders and customers psychological level.
