After a record rally, local PE and PP prices in China collapsed on Wednesday (April 15) morning. For PP, Chinese traders found difficulties in selling the cargoes at high prices since the market sentiment dropped into negative ground following the softer PP prices in the futures market. As a result, most of the traders initiated a price reduction of between CNY1,000-2,000/ton ($142-284/ton) on a day interval for spot PP Homo Raffia cargoes. On Wednesday (April 15), a trader from Ningbo informed SSESSMENTS.COM that based on May 2020 PP contract, the spread between futures and spot market are between CNY1,500-2,000/ton ($213-284/ton). “Under normal market conditions, the spread is usually about CNY400-600/ton ($57-85/ton),’’ the trader explained further.
Previously, China saw a strong enthusiasm from buyers in the spot PP market despite the downturn in the futures market that started on April 14. However, most market players view the current situation as below the expectations as demand from downstream factories is not significant. “The uptrend in the China market will be short-lived without strong demand to support the prices,” one of the sources said to SSESSMENTS.COM.
As for PE, most Chinese traders have adjusted down local PE offers across all grades between CNY200-300/ton ($28-42/ton) compared to a day earlier in a bid to move out inventory on hand before the market drop back to March levels. Some downstream factories are running at a low capacity due to limited order from end-users. ‘’One of our customers, an export-oriented tarpaulin maker stated that their company has no orders until the end of April while a second converter has just restarted their plants in early April. The orders from end users are very limited, thus the operating rate is very low,’’ a trader reported to SSESSMENTS.COM.
Looking ahead, most market participants voiced out to SSESSMENTS.COM that the uptrend in the China PE and PP market will not be able to sustain for a long time. Some sources expressed that the possibility of PP Homo Raffia prices to move even lower remained high as the futures market entered into bearish territory.
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Tags: Asia Pacific,China,English,NEA,News,PE,PP
Published on April 15, 2020 7:18 PM (GMT+8)
