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QuarterlySSESSMENTS: Q3 2019 China PE Prices


  • PE prices in China were on a downtrend from the second half of July until the end of August

  • Overall PE demand during Q3 was weak, supply was sufficient to ample

  • The lowest level of the major polyolefins producers’ inventory was recorded on September 19

Data collected by SSESSMENTS.COM showed that in the first two weeks in Q3 2019, local and import PE prices in China were on an uptrend. Then, local prices continued to decrease until the last week of August while for import prices, the downtrend prolonged until the first week of September. In the last week of August, local HDPE Film was available at CNY7,800/ton ($1,103/ton) while LLDPE Film C4 at CNY7,100/ton ($1,004/ton) on cash, EXW China basis, and including 13% VAT. Meanwhile, the lowest level for import LLDPE Film C4 cargoes which surfaced in the first week of September was from India, at $780/ton on LC at sight, CIF China Main Port basis. For LLDPE Film C4 of Thailand origin, the cumulative reduction from July to August was $165/ton. 

The shift in trend for local PE prices in China in the week commencing September 2 was due to the continued increases in the futures market since the first day of the week. Local offers across PE grades were finally adjusted up between CNY30-200/ton ($4.2-28.2/ton) on a weekly comparison. Considering the stronger prices in the local market and a considerably healthy level of market inventory, in the second week of September, a Thai PE producer attempted upward adjustment on HDPE Film and LLDPE Film C4 offers by $25/ton and $15/ton, respectively, compared to a week earlier. 

Another round of increases in both local and import PE prices was captured in the third week of September after a series of drone attacks hit Saudi oil facilities that led to a hike in crude oil prices. A Thai producer reported to SESSMENTS.COM that the company sold out allocation for HDPE Film and local traders also reported that a high number of deals were concluded. For LLDPE Film C4, a Thai PE producer increased offers three times, but the third upward adjustment in the morning on September 19 received cold responses from buyers. Therefore, in the afternoon, the producer decreased the offers by $10/ton compared to the level given in the morning. The uptrend in local PE prices did not last long as in the last week of September, prices fell following the softer futures market.

Overall PE demand in China during Q3 is considered weak. An uptick in demand was only seen in the third week of September as buyers rushed to make procurements, afraid that prices would move higher. However, after Saudi announced that the oil output could be recovered faster than predicted, demand sagged as buyers retreated to a wait-and-see position. On the supply side, SESSMENTS.COM was informed that the market supply for PE was sufficient to ample. On July 1, the inventory of the major polyolefins producers in the country stood at 755,000 tons while on September 30, at 605,000 tons. The lowest inventory level was reported on September 19, at 560,000 tons. 

Entering Q4 2019, market players contacted by SESSMENTS.COM believe that demand will continue to be sluggish. In November, the weather in China will be terribly cold and converter might decide to reduce the operating rate or even halt production activities. LLDPE Film C4 offers are predicted to break below CNY7,000/ton ($990/ton) on cash, EXW China basis, and including 13% VAT by that time. Additionally, new PE plants in Russia, Malaysia, and Indonesia as well as inside China will also put pressure on PE prices in China.

*offers on TT 

**offers on FD basis

*offers on CFR basis

*offers on FD basis

*offers on CFR

Tags: Asia Pacific,China,English,EN PE CHINA QSS,Northeast Asia,Polyethylene (PE),QuarterlySSESSMENTS China PE Prices,PE Prices

Published on October 25, 2019 8:49 PM (GMT+8)
Last Updated on January 14, 2020 7:43 AM (GMT+8)