A Chinese producer informed SSESSMENTS.COM that the limited supply in the domestic market continues to support PE and PP prices in the country. From the producer’s end, local LLDPE Film C4 and PP Homo grades offers remain stable from last week. Offers for LLDPE Film C4 are available between CNY6,600-6,700/ton ($934-948/ton) on cash, EWX basis and including 13% VAT. While for PP, PP Homo injection and PP Homo Raffia cargoes are being offered at the same level between CNY7,750-7,850/ton ($1,097-1,111/ton) on the same payment and delivery term.
Further explained, usually, offers for PP Homo Injection are CNY100-200/ton ($14-28/ton) higher than PP Homo Raffia prices. However, as a high volume of import cargoes are entering the China market, especially in South China, PP Homo Injection prices could not move higher. Market talks have it that even some traders are selling PP Homo Injection at CNY50/ton ($7/ton) lower than PP Homo Raffia prices. At the moment, the producer is focusing on selling to South and East China due to the higher prices compared to the North and West areas, SSESSMENTS.COM was told.
As for demand, the producer still received inquiries and orders every week. However, most buyers are only purchasing on a need basis as no significant demand improvement seen for the finished products yet. SSESSMENTS.COM was told that the current production rates at some PP converters remain stable at 55%, while converters dealing with LLDPE Film for agriculture sector is mostly running at lower rates of only 15% from normal production as this time of the year is a low season for agricultural film demand.
On the supply front, the producer only has supply for LLDPE Film C4 and PP Homo grades materials. While for HDPE Injection, no supply yet due to a technical issue earlier, still, the producer plans to continue production of this grade in the near term, as stated to SSESSMENTS.COM. Likewise, the producer did not produce PP Block Copolymer materials for around six months as the company is focusing more on producing PP Homo grades. However, the volume for PP Homo grades is not per usual as the producer is also producing PP Random Copolymer grades.
