Local/localized PE offers on cash, EXW China basis (including 13% VAT in CNY terms, excluding VAT in USD term)
Delay in shipment of Iranian PE cargoes is affecting supply and market sentiment in China market, a trader revealed to SSESSMENTS.COM. Iran, a key PE supplier in China, is facing a major supply chain challenges in an escalation of tensions with the US, resulting in supply shortage in China market. As such, China’s domestic and import PE prices are on an upward trajectory over the past week amid supply disruptions from the US-sanctioned country, which generated bearish market sentiment. Shipment for import PE cargoes from Iran has been delayed as new US sanctions against Iran take effect after a 180-day “wind-down” period ending in early June 2020. According to SSESSMENTS.COM database, in 2019, China imported 1,501,067 tons of HDPE from Iran, 751,754 tons of LDPE and 302,886 tons of LLDPE. For LDPE, Iran was the top supplier in 2019.
In the domestic market, a Chinese trader initiated a price increase of CNY100/ton ($14/ton) for local HDPE Film cargoes from last week’s level. Similarly, offers for localized Taiwanese HDPE Film were adjusted up by a similar amount as compared to the same period. However, the trader said that the company has no allocation for localized Saudi, Malaysian and Taiwanese HDPE Film to the domestic market this week, adding that allocation for Malaysian cargoes in their warehouse has been sold out. From the import market, the trader received fresh import PE offers from a Russian producer in the previous week. In comparison to the offer level available two weeks earlier, producer’s offers for HDPE Blow Moulding were available at $10/ton higher, captured at $800/ton on LC at sight, CIF China Main Port basis. Similarly, offers for LDPE Film posted a significant increase of $40/ton as compared to the same period, available at $890/ton with the same payment and delivery terms. As for Middle Eastern origin, market talks have it that the leading Saudi polyolefins producer announced higher offers this week to China market. SSESSMENTS.COM was informed that current HDPE Film and LLDPE Film C4 offers from the Saudi producer are heard at $10/ton higher on the weekly comparison.
For the outlook, the trader voiced out to SSESSMENTS.COM that there would be room for local and import PE prices to move higher in the near term, considering relatively tight supply in the market, and logistical delays due to an accumulation of Iranian vessels carrying PE cargoes in China ports amid new US sanctions.
Tags: Asia Pacific,China,English,Iran,NEA,News,PE
Published on July 1, 2020 3:44 PM (GMT+8)Last Updated on July 1, 2020 3:44 PM (GMT+8)
