A Chinese trader informed SSESSMENTS.COM on the reasons behind the firm prices for local and localized PE cargoes in the country. Coming to June 22 morning, local and localized PE prices in China remain firm, particularly for HDPE Film and LDPE Film. According to the trader, PE prices have continued to hike up each week as supported by the uptrend in ethylene prices. LDPE Film prices remain the strongest among other PE grades. More added, the current LDPE Film supply is rather tight in the market since several LDPE plants in China are still under maintenance shutdown.
On the other hand, at the beginning of June, Iranian cargoes could not dock at Qingdao Port and have been waiting for dock plans. While at the moment, the trader added that the Iranian ships could not dock at Shanghai Port as well; hence, the shipment for Iranian cargoes has been delayed. With the absence of Iranian cargoes, at the moment, traders could maintain firm PE prices in the spot market. Further explained, one of the reasons for the delayed shipment of Iranian cargoes is that the production at the Iranian PE producer’s side has been affected by the COVID-19. Moreover, all ships from this country have to be checked for the safety concern. The other reason, converters with healthy cash flows prefer to stock up Iranian cargoes in anticipation of limited materials availability or longer lead time after the US imposed sanction on Iran, SSESSMENTS.COM noted.
From the trader’s end, SSESSMENTS.COM’s pricing database showed that local and localized Iranian LDPE Film offers remain stable from last week and stand between CNY8,200-8,500/ton ($1,159-1,202/ton) on cash, EXW China basis and including 13% VAT. Similar to LDPE Film, offers for local and localized Iranian HDPE Film cargoes maintained stable between CNY7,700-8,100/ton ($1,089-1,145/ton) on the same payment and delivery terms. Still, as the supply for HDPE Film is ampler than LDPE Film, buying sentiment for HDPE Film is weaker. While for LLDPE Film C4, the firm prices supported by the uptrend in monomer price and low inventory in the local market. However, following the drops in the futures market by Monday morning trading session, local LLDPE Film C4 offers from the trader’s end revised down by CNY50/ton ($7/ton) from the last trading day.
Most buyers show resistance towards current PE prices as this time of the year is a traditional low season for the finished product demand. The trader opined that buyers’ responses towards most July shipment offers, which expected to come out with upward adjustments would not be positive, as stated to SSESSMENTS.COM.
