The leading Saudi polyolefins producer unveiled its latest PE offers to the China market this week, along with views on pricing outlook. As compared to last week’s level, the producer trimmed their HDPE Injection offers slightly by $10/ton, while offers for HDPE Film and HDPE Blow Moulding cargoes were adjusted down by $20/ton. SSESSMENTS.COM was informed that sour downstream demand, coupled with the downtrend in the futures market cited as main factors pushing the producer to lower their offers. In contrast, the producer opted to roll over offers for LDPE Film, LLDPE Film C4, and LLDPE Injection compared to the same period since the company has no sales pressure for these grades so far.
Expressing their views on market outlook, the producer foresees that China’s polyethylene market would remain bearish from August until October this year. After a sudden and sharp increase in prices caused by delayed Iranian cargoes, prices have started to decline as the market absorbed news of weaker-than-expected domestic demand. Suppliers may be looking for an upturn, but with no strong demand fundamentals to support any form of price hikes, there would be no room for PE prices to move higher. Traditionally, downstream demand for PE will enter a seasonal uptick from September to October. However, the producer voiced out to SSESSMENTS.COM that traditional peak demand will fail to materialize as the market continues to be unpredictable and changing rapidly this year. On the funds’ prospect, after commodity futures contracts are settled by physical delivery at expiration in August and September, capital players should take into account the market sentiment. Therefore, the producer thinks that there will be a huge drop in prices around September and October.
