As contacted by SSESSMENTS.COM, a global trading house highlighted the lofty import polyolefins prices in the China market, as well as positive and negative factors that predispose futures price movements. This week, the trader informed on receiving August shipment offers for South Korean HDPE Film at $970/ton and HDPE Pipe (PE 100) at $950-960/ton, but no comparison available as the trader is not receiving the offers on a regular basis. Under normal circumstances, the offers for HDPE Film are usually lower than HDPE Pipe, yet this time, the HDPE Film offers are higher owing to the delayed Iranian cargoes. From a Saudi producer, the August shipment offers for HDPE Film went up by $50/ton from July shipment. At the moment, the producer skips offering LDPE Film and LLDPE Film C4 due to nil allocations.
As for PP, the Saudi producer is offering August shipment PP Homo Raffia cargoes at $10/ton higher than July shipment. No applicable comparisons for the Saudi producer’s offers for PP Block Copolymer and PP Random Copolymer cargoes. Moreover, September shipment offers for PP Homo Raffia from the leading Indian petrochemical producer surfaced with a slight increase of $5/ton compared to a fortnight ago. Responding to the offers, the trader commented to SSESSMENTS.COM that the current import offers are considered as high; such a level coupled with the softer futures market prices has pushed Chinese buyers to a reluctant stance.
Speaking of the futures market, the trader voiced out to SSESSMENTS.COM that there are some positive and negative stimuli that could determine the movement of futures prices in the days to come. However, the trader is pessimistic about the futures price movements since there are more negative factors developing in the market. First, in August and September, overseas cargoes such as the US, Middle East, and India will arrive in China ports. Second, weakening demand following the upcoming arrival of Iranian cargoes, which is expected to be docked in August. Third, inventory pressure stemming from the additional PE and PP capacities of around 5.1 million tons/year, which is expected to come on-stream within this month until year-end. Fourth, lacklustre demand inside and outside China.
On the other side, there are still some positive factors that hopefully could prop up the futures market prices, the trader further added to SSESSMENTS.COM. One of them is the traditional peak season from September to October. Still, the trader itself could not guarantee the presence of this peak season. Aside from that, firmer crude oil prices also counted as the support system for futures prices, citing that it is rather hard for crude oil prices to drop in the second half of 2020 since giant oil producers have reached a consensus.
Import PE, PP offers on LC at sight, CIF China Main Port basis
Tags: Asia Pacific,China,English,NEA,News,PE,PP
Published on July 16, 2020 4:49 PM (GMT+8)
