Demand Factor Predicted To Sway Local PE Prices In China
- Contrasting adjustment captured for certain PE grades
- Zhongtian Hechuang Energy’s LDPE plant experienced an unplanned shutdown
- Local PE prices predicted to fluctuate between CNY200-250/ton ($28-35/ton)
Market sources in China informed SSESSMENTS.COM that demand factor is predicted to sway local PE prices. In the domestic market, a trader decided to keep the offers for local HDPE Film and HDPE Yarn cargoes stable from last Friday’s level. For local HDPE Pipe (PE 100), the trader adjusted down prices by CNY200/ton ($28/ton) as compared to the same period. Meanwhile, another trader decided to increase offers for local HDPE Film cargoes by CNY100/ton ($14/ton) compared to a week earlier supported by the increases in futures prices. From the import market, offers for HDPE Film of Saudi origin were recorded stable to firmer by $30/ton from last week. Likewise, offers for South Korean HDPE Film cargoes also increased by $60/ton from three weeks ago. However, buyers are showing resistance toward the offers and some transactions are still under negotiations. Meanwhile, import offers for HDPE Film cargoes of US origin were kept stable from last week. For HDPE Yarn of South Korea origin, deals were achieved at $810/ton on LC 90 days, CIF China Main Port basis, which is $20/ton higher compared to the level in early May.
For LDPE Film and LLDPE Film C4, local offers were captured higher between CNY50-100/ton ($7-14/ton) and by CNY50/ton ($7/ton) respectively from last Friday’s levels. From the import market, offers for Qatari LDPE Film edged higher by $10/ton from last week. While for LDPE Film and LLDPE Film C4 of Saudi origin, prices increased by $10/ton and $10-30/ton respectively on a weekly comparison. Sources added to SSESSMENTS.COM that deals for Saudi LLDPE Film C4 concluded at the initial offer level at $760/ton on LC at sight, CIF China Main Port basis.
According to market sources contacted by SSESSMENTS.COM, China market remains sluggish due to uncertainties from the macroeconomic sector. Moreover, sources stated that citizens are careful about their spending, although the Coronavirus pandemic in China has been handled. People avoid high priced spending or non-essential products. As such, satisfactory demand is only captured for food packaging and medical-related products. On the supply side, the inventory of the two leading Chinese polyolefins producers recorded at 705,000 tons as of Thursday morning. Compared to Monday’s level, the inventory decreased by 85,000 tons. On the production sector, sources informed that Zhongtian Hechuang Energy’s LDPE plant experienced an unplanned shutdown on May 25 due to technical issues. The plant located in Inner Mongolia, China with a total capacity of 670,000 tons/year will remain shut for 28 days.
Looking ahead, market players expressed to SSESSMENTS.COM on the possibility for local PE prices to fluctuate between CNY200-250/ton ($28-35/ton) considering the slow aggregate demand in the domestic market, that is predicted to sway PE prices.
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