Market sources informed SSESSMENTS.COM on China PE market reactions to record lows US crude oil prices. Currently, spot offers for local PE cargoes across different grades declined between CNY200-300/ton ($28-42/ton) compared to last Friday’s (April 17) level. Likewise, import offers for the same materials from several suppliers also recorded moving lower this week. From Thailand, the offers for HDPE grades dropped between $60-120/ton, while for LDPE Film, the offers slipped by $20/ton. All compared to last Tuesday’s (April 14) level. For LLDPE Film C4, the Thai producer corrected down the offers by $5/ton from the level on Thursday, April 16. Moreover, import offers for Saudi HDPE Film and LLDPE Film C4 also dipped by $40 and $20/ton, respectively, from last week’s level.
Further added to SSESSMENTS.COM, import LDPE Coating offers of South Korea origin at $1,040/ton on LC at sight, CIF China Main Port basis has gained zero bids from buyers, so far. Buyers cited that the acceptable prices should be around $900-plus/ton. For US cargoes, a trader managed to sell HDPE Blow Moulding at $710/ton and the shipment would be done before June 15, 2020. Meanwhile, the leading Saudi polyolefins producer is still quoting high prices as the company claimed not having any allocation for this week. As for Indian origin LLDPE Film C4, June shipment offers are available between $720-730/ton. All offers are on LC at sight, CIF China Main Port basis.
According to the information provided by Chinese market players to SSESSMENTS.COM, the downtrend in the local and import market is mainly caused by the collapse in crude oil prices. May's U.S. WTI (the US benchmark) contract nosedived by $55.90, or 306%, settled in negative territory for the first time amid a devastating supply glut at -$37.63 per barrel. Brent was down $2.51, or 9%, settled at $25.57 per barrel. Due to this, sentiment is heavily impacted and leads to buyers to halt procurement and wait on the sidelines. Besides, buying appetite has also eroded by the drop in futures market prices, captured at below CNY6,000/ton-level again, to a level seen at the beginning of the month. As noted, September LLDPE futures on the Dalian Commodity Exchange fell CNY215/ton ($30/ton), settling at CNY5,870/ton ($829/ton) by Tuesday settlement.
As the market activities in China remains dull, the supply in the local market continues to pile up. As of Tuesday morning, April 20, the inventory level of the two leading polyolefins producers stood at 960,000 tons, an increase of 60,000 tons from last Friday’s level. Even when compared to the beginning of April, the inventory level was only digested as much as 175,000 tons, SSESSMENTS.COM noted.
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Import PE offers on LC at sight, CIF China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Market Commentary |
|---|
| USA | LLDPE Film C4 | Offer Given | 650-670 | Heard other sellers sold US LLDPE Film C4 at $650-670/ton. The trader stated that profit margin still exists, but without volumes to support, sellers are experiencing difficult times |
| Thailand | HDPE Film | Offer Given | 810 | -$120/ton from last week |
| Thailand | HDPE Yarn | Offer Given | 790 | -$60/ton from last week |
| Thailand | LDPE Film | Offer Given | 860 | -$20/ton from last week |
| Thailand | LLDPE Film C4 | Offer Given | 770 | -$5/ton from last week |
| Thailand | LLDPE Film C4 | Sold | 770 | Deal at initial level for Thai PE producer only for LLDPE Film C4, other products no transactions yet |
| South Korea | LDPE Coating | Offer Received | 1,040 | No bids at all. Only one customer stated that the acceptable price is $900-plus/ton level. |
| USA | HDPE Blow Moulding | Sold | 710 | Shipment before June 15 |
| India | LLDPE Film C4 | Offer Given | 720-730 | Heard price in the market for June shipment |
| Saudi | HDPE Film | Offer Given | 820 | No allocation from the leading Saudi polyolefins producer for this week, hence quoted higher offer |
| Saudi | LLDPE Film C4 | Offer Given | 780 | No allocation from the leading Saudi polyolefins producer for this week, hence quoted higher offer |
| Saudi | HDPE Film | Offer Received | 730 | -$40/ton from last week |
| Saudi | LLDPE Film C4 | Offer Received | 720 | -$20/ton from last week |
| Singapore | LLDPE Film C4 | Offer Received | 750 | On Monday buyers showed interest in making procurement, however, as the US crude oil price plunged, buyers halted procurement. |
| Saudi | LLDPE Film C4 | Offer Received | 750 | Leading Saudi polyolefins producer offered at $750/ton on April 20, but on April 21 the producer informed that $700/ton is acceptable with delayed shipment. |
| Saudi | LLDPE Film C4 | Sell Idea | 700 | Leading Saudi polyolefins producer offered at $750/ton on April 20, but on April 21 the producer informed that $700/ton is acceptable with delayed shipment. |
| Kuwait | LLDPE Film C4 | Offer Received | 710-720 | Last purchase from Kuwaiti producer was at $660/ton, therefore will skip fresh purchases at $710-720/ton for now |
| Saudi | LLDPE Film C4 | Offer Received | 720 | One of the Saudi producers initially indicated to offer at $750/ton, which is $10/ton higher than last week, but ended up offering at $720/ton, $20/ton lower than a week ago |
| Saudi | LLDPE Film C4 | Offer Received | 720 | One of the Saudi producers initially indicated to offer at $750/ton, which is $10/ton higher than last week, but ended up offering at $720/ton, $20/ton lower than a week ago |
September 2020 LLDPE Futures Prices On Dalian Commodity Exchange
| Date | Dalian LLDPE Settlement (CNY/ton) |
|---|
| 1-Apr-2020 | 5,515 |
| 2-Apr-2020 | 5,695 |
| 3-Apr-2020 | 5,830 |
| 7-Apr-2020 | 6,060 |
| 8-Apr-2020 | 6,005 |
| 9-Apr-2020 | 6,000 |
| 10-Apr-2020 | 6,130 |
| 13-Apr-2020 | 6,395 |
| 14-Apr-2020 | 6,215 |
| 15-Apr-2020 | 6,185 |
| 16-Apr-2020 | 6,190 |
| 17-Apr-2020 | 6,240 |
| 20-Apr-2020 | 6,080 |
| 21-Apr-2020 | 5,870 |
Tags: Asia Pacific,China,English,NEA,News,PE
Published on April 21, 2020 5:28 PM (GMT+8)
Last Updated on April 29, 2020 11:03 AM (GMT+8)
