China PE Market Loses Ground On Coronavirus Fears, Funds Injection From Government Expected To Help Business To Recover Shortly
- Local, localized Middle Eastern PE offers dropped between CNY100-400/ton ($14-57/ton)
- Polyolefins inventory level of Sinopec and CNPC stood at 1.25 million tons
- Some players expecting trading activities to start to normalize by the second half of February
China PE market is losing its ground on Coronavirus fears, as cited by SSESSMENTS.COM. In the domestic market, this week offers for PE across all grades from producers and traders reported down between CNY100-400/ton ($14-57/ton) compared to the level before the Lunar New Year holiday. The significant reduction was in line with the decreases in futures prices. On Monday, February 3, May 2020 LLDPE contract on the Dalian Commodity Exchange recorded a huge reduction of CNY425/ton ($61/ton). However, as the week progressed, futures prices start to stabilize. In the import market, overall offers for import Middle Eastern PE cargoes remain unchanged from the level before the holiday. However, a trader reported receiving offers for HDPE Film and HDPE Blow Moulding from a Saudi producer between $60-80/ton higher as compared to the same period. The tight supply from the producer’s end was cited as the reason behind the price increases. For Thai cargoes, March shipment offers for HDPE Film and LLDPE Film C4 stood at $935/ton and $930/ton respectively, on LC at sight, CIF China Main Port basis. No price comparison as the producer skipped offering cargoes last month.
Demand for PE resins during the week reportedly remain sluggish as trading activities have not fully resumed due to extended holiday amid the grave concern over Coronavirus outbreak. On the supply side, the polyolefins inventory level of Sinopec and CNPC stood at 1.25 million tons as of Thursday morning, increased by 25,000 tons from Wednesday’s level. As compared to the level on Monday, February 3, it showed an increase of 100,000 tons, SSESSMENTS.COM noted.
For the outlook, some players expecting market activities in China start to normalize by the second half of February. As China’s central bank has injected a total of 1.2 trillion yuan ($173.81 billion) and lowered the interest rates on reverse repurchase agreements, businesses are expected to recover from the current situation. In terms of price, some players believe there would not be any chances for a price increase in the domestic market for this month, SSESSMENTS.COM was told.
Tags: Asia Pacific,China,English,EN PE CHINA WSS,Northeast Asia,Polyethylene (PE),WeeklySSESSMENTS China PE Prices,PE PricesFebruary 6, 2020 1:08 PM