While China PE and PP market are facing a new obstacle, the latest offers from a Qatari producer emerge with some adjustments, SSESSMENTS.COM noted. A global trading house informed that offers for localized LLDPE Film C4 cargoes from Qatar increased by CNY10/ton ($1/ton) due to depreciation of Chinese Yuan against US Dollar. From the import market, a Qatari producer also released the latest offers for PE cargoes. HDPE Film is offered at $850/ton and LDPE grades between $885-1,010/ton, while LLDPE Film C4 remains stable from last week's level at $800/ton. Speaking of other producers, a Singapore-based producer increased offers for mLLDPE C6 cargoes went up by $10/ton from last week, now at $1,030-1,060/ton. For PP Homo Raffia, Middle Eastern origin cargoes are available at $900-930/ton. All import offers on LC at sight, CIF China Main Port basis.
Demand-wise, the trader reported that offers from Qatar received good response from buyers, especially for HDPE Film cargoes. Regarding the overall situation, the trader shared that now the fundamental demand for PP and PE exists in China. Local inventory recorded at low levels while monomer prices remain firm, as such, local prices remain on an upward trend. Regarding import offers, the trader told SSESSMENTS.COM that supply remains limited since mid-May when ethylene and propylene prices were hiked as well as other countries have gradually resumed their businesses following coronavirus lockdown. The limited allocation for PE and PP raises trader impression that producers are having difficulty in making profits due to rising raw material prices, so they will try to shift the focus of sales from polyolefins to monomers. Otherwise, following the market's general notion, domestic scarcity triggered as China is no longer limited to consuming after lockdown eased, they start selling their cargoes to other regions as well.
Looking ahead, trader says that buying sentiment for resins and the digestion rate for finished goods will affect the price movements. SSESSMENTS.COM noted with the increased cost of monomers, the cost of polyolefins will increase as well. Higher PP and PE prices then will shore up in the market if buyers can get orders from end-users to make profits. Otherwise, lack of support from demand will push the upstream producers to adjust down the operating rate causing tightness in supply.
