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WeeklySSESSMENTS: China PE Prices Week Starting July 20

Author: SSESSMENTS

Some Sellers Started Revising PE Prices Following Negative Sentiment In China Market

  • Some sellers adjusted both local and import offers
  • Demand remains weak amid the traditional low season
  • August market outlook is bearish

China market saw price adjustment on both local and import PE cargoes following negative sentiment. In the domestic market, a producer informed SSESSMENTS.COM that the company adjusted down their offers for LLDPE Film C4 by CNY50/ton ($7/ton) following market dynamics. On traders’ side, local offers for PE cargoes across all grades were also adjusted down between CNY100-300/ton ($14-42/ton), while localized cargoes dropped by CNY100-200/ton ($14-28/ton) as futures market on a downward trend. All on a weekly comparison.

In the import market, a Thai PE producer trimmed offers to the China market. As compared to Monday, July 20, the producer’s offers for HDPE Film surfaced with a reduction of $20/ton. Likewise, offers for LLDPE Film C4 decreased by $15/ton. Upon price reduction, the producer managed to sell some volumes for HDPE Film at the initial offer level while for LLDPE Film C4 at $5/ton lower on the low-end of the price range. Meanwhile, the leading Saudi polyolefins producer opted to lower HDPE Film and HDPE Blow Moulding offers by $20/ton as compared to last week’s offers. In contrast, the producer maintained stable offers for LDPE Film and LLDPE Film C4. A South Korean producer also chose to maintain export offers for HDPE Film to China stable from last week’s level. The producer told SSESSMENTS.COM they acknowledged that other suppliers were adjusting down the offers for PE grades, however, the company decided to monitor market development further before adjusting the offers. From the traders’ side, a global trading house revealed that a Saudi producer has decreased HDPE Film offers by $10/ton on a weekly comparison, available at $920/ton on LC at sight, CIF China Main Port basis.

Demand for PE in the China market remains slow amid the traditional low season. SSESSMENTS.COM noted floods with high-intensity rain descended around the middle part of China pushing down demand which already burdened by the decline in export for finished products due to trade war. Further added, market sources told that some buyers decided to skip placing bids this week since they believe prices might drop again next week. From the production side, market sources informed that CNOOC and Shell Petrochemicals Co Ltd (CSPC) halted production at its LLDPE unit for unplanned maintenance. As noted, the LLDPE unit no. 1 with a production capacity of 270,000 tons/year reportedly has been shut since Friday, July 17. Located in Guangdong province, China, the company’s LLDPE unit no. 1 is slated to be off-line for around one week. On the supply side, inventory levels of the two leading polyolefins producers in the country decreased by 65,000 tons compared to level on Monday, July 20, recorded at 715,000 tons as of Thursday morning (July 23).

Expressing their views on market outlook, market sources foresee that China’s PE market would remain bearish going into August. 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, one of the producers voiced out to SSESSMENTS.COM that traditional peak demand could fail to materialize as the market continues to be unpredictable and changing rapidly this year.

Local/localized PE offers on cash, EXW China basis (including 13% VAT in CNY term, excluding VAT in USD term)

OriginProductTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaHDPE Blow MouldingPrice List7,300927
ChinaHDPE FilmOffer Given8,300-8,6001,050-1,088
ChinaHDPE FilmPrice List8,4001,062
Middle EastHDPE FilmOffer Given8,800-9,0001,113-1,138
USAHDPE FilmOffer Given7,600961
ChinaHDPE Pipe (PE 100)Price List8,1001,024
ChinaHDPE YarnPrice List7,800-7,900986-999
ChinaLDPE FilmOffer Given8,700-8,8501,100-1,119
ChinaLDPE FilmPrice List8,5501,081
Middle EastLDPE FilmOffer Given8,900-9,1001,126-1,151
ChinaLLDPE Film C4Offer Given7,200-7,600910-961
ChinaLLDPE Film C4Price List7,200-7,300910-927
KuwaitLLDPE Film C4Offer Received7,160906
Middle EastLLDPE Film C4Offer Given7,500948
SaudiLLDPE Film C4Offer Given7,600961

Import PE offers on LC at sight, CIF/CFR China Main Port basis

OriginProductTransaction TypeOffers (USD/ton)Delivery Term
Middle EastHDPE Blow MouldingOffer Given910CIF
Far East AsiaHDPE FilmOffer Given920-970CIF
Far East AsiaHDPE FilmOffer Received980-985CIF
Middle EastHDPE FilmOffer Given950-980CIF
Middle EastHDPE FilmOffer Received920-950CIF
Southeast AsiaHDPE FilmOffer Given960-1,030CIF
Southeast AsiaHDPE FilmOffer Received910-960CIF
Southeast AsiaHDPE FilmSold960CFR
Southeast AsiaHDPE FilmSold960CIF
Far East AsiaHDPE Pipe (PE 100)Offer Given960CIF
Far East AsiaHDPE Pipe (PE 100)Sold960CIF
Southeast AsiaHDPE YarnOffer Given900-940CIF
Middle EastLDPE FilmOffer Given960-1,030CIF
Middle EastLDPE FilmOffer Received990CIF
Southeast AsiaLDPE FilmOffer Given1,015CIF
Latin AmericaLLDPE Film C4Offer Received840CIF
Middle EastLLDPE Film C4Offer Given840-880CIF
Southeast AsiaLLDPE Film C4Offer Given885-900*CIF
Southeast AsiaLLDPE Film C4Offer Given885CFR
Southeast AsiaLLDPE Film C4Offer Received885CIF
Southeast AsiaLLDPE Film C4Sold880CFR
Southeast AsiaLLDPE Film C4Sold880-885CIF
Description: *offers on Monday, July 20

Tags: Asia Pacific,China,English,NEA,PE,Weekly

Published on July 23, 2020 2:02 PM (GMT+8)
Last Updated on July 23, 2020 2:56 PM (GMT+8)