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WeeklySSESSMENTS: China PE Prices Week Starting July 6


Seizing The Momentum, China PE Prices On Rally Despite The Traditional Pattern

  • Local sellers are utilizing the momentum before the Iranian vessels manage to unload the materials
  • Buyers are on a cautious stance amid the bullish market
  • Outlook for China PE market remains positive onwards

Within the week commencing July 6, China PE market managed to maintain the price trend despite the traditional low season. PE prices in the futures market and relatively tight supply for PE noted as the supporting factors of the bullish China’s PE market. In the local market, a Chinese polyolefins producer made an upward price adjustment of between CNY100-150/ton ($14-21/ton) for LLDPE Film C4 on July 6. Likewise, offers for local and localized LDPE Film and LLDPE Film C4 of Middle East origin from the traders’ end have increased by CNY100/ton ($14/ton). For HDPE Film, increment of CNY50/ton ($7/ton) for local and localized Middle Eastern cargoes captured from the traders’ end. SSESSMENTS.COM was told that the increases on LDPE Film and LLDPE Film C4 are higher compared to HDPE Film as the supply for LDPE Film is very tight at the moment, stemming from scheduled maintenance shutdown. While for LLDPE Film C4, the offers in the futures market have an immediate impact on the spot prices. As such, once the futures market is on the uptrend, spot prices follow suit in a short time. 

Upward price adjustment also captured in the import market. Offers for HDPE Film and LLDPE Film C4 from the leading Saudi polyolefins producer have increased by $20/ton and $10/ton respectively. For South America LLDPE Film C4 cargoes, a trader increased the offers by $10/ton, at $830/ton with the estimated time of arrival at the end of July. For Southeast Asian cargoes, a Thai PE producer increased the offers for LLDPE Film C4 by $40/ton, at $910/ton. This week, the producer resumed offering HDPE Film after ceasing last week. Import Thai HDPE Film offers to the China market is available at $1,015/ton. The producer claimed that the tight supply on the producer’s end is the major ground of the high prices. However, buyers opined to SSESSMENTS.COM that the high-end level of Iranian HDPE Film offers are expected to be at $930/ton. As such, the offers for Thai HDPE Film cargoes are deemed too high. All import offers are on LC at sight, CIF China main port basis. All price changes in this story are on a weekly comparison unless stated otherwise.

Demand-wise, no improvement in buying appetite compared to last week. Instead, buyers are on a cautious stance amidst the rally of local and import PE prices as they are being sceptical about the sustainability of the current uptrend. Moreover, July is the traditional low season for PE demand. On the supply front, most Chinese market players expect that the vessels of Iranian cargoes will be able to unload the materials within this week or this month. As of July 9, the inventory level of two leading Chinese polyolefins producers reported at 660,000 tons. SSESSMENTS.COM noted that the current level has digested by 75,000 tons compared to Monday, July 6.

Looking ahead, Chinese market players foresee that PE prices would be able to maintain its uptrend. Although the arrival of Iranian PE cargoes and Middle Eastern cargoes expected to be in unison, it would not drag PE prices down adding that 70% of Iranian cargoes are already booked. While in terms of demand, buying sentiment predicted to remain flat, as stated to SSESSMENTS.COM.

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

OriginProductTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaHDPE Blow MouldingPrice List7,700-7,900972-997
ChinaHDPE FilmOffer Given8,200-8,4001,035-1,060
ChinaHDPE FilmPrice List8,000-8,2001,010-1,035
Middle EastHDPE FilmOffer Given8,300-8,3501,047-1,054
ChinaHDPE Pipe (PE 100)Price List8,100-8,3001,022-1,047
ChinaHDPE YarnPrice List7,500-8,000946-1,010
ChinaLDPE FilmOffer Given8,550-9,0001,079-1,136
ChinaLDPE FilmPrice List8,600-9,1501,085-1,155
Middle EastLDPE FilmOffer Given8,600-8,7001,085-1,098
ChinaLLDPE Film C4Offer Given7,200-7,600909-959
ChinaLLDPE Film C4Price List7,150-7,600902-959
Middle EastLLDPE Film C4Offer Given7,300-7,400921-934

Import PE offers on LC at sight, CIF China Main Port Basis

OriginProductTransaction TypeOffers (USD/ton)
Middle EastHDPE FilmOffer Given900-960
Southeast AsiaHDPE FilmOffer Given1,015
Southeast AsiaHDPE FilmPurchased1,010-1,015
Southeast AsiaHDPE FilmOffer Received960-1,015
Southeast AsiaHDPE YarnOffer Received930-940
Middle EastLDPE FilmOffer Given910-960
Middle EastLLDPE Film C4Offer Given820-840
North AmericaLLDPE Film C4Offer Received830-860
South AmericaLLDPE Film C4Offer Given830
Southeast AsiaLLDPE Film C4Offer Given910
Southeast AsiaLLDPE Film C4Offer Received910
Southeast AsiaLLDPE Film C4Purchased910
Southeast AsiamLLDPE C6Offer Received1,020

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

Published on July 9, 2020 2:13 PM (GMT+8)
Last Updated on July 9, 2020 2:13 PM (GMT+8)