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WeeklySSESSMENTS: China PE Prices Week Starting July 27


Adjustments Captured On Majority PE Offers As China Market Dials Down Buying Activities

  • Local and import offers move in tandem, except import offers from the Middle East
  • Demand dials down as market anticipates price and supply changes
  • Outlook for pricing and demand depends on several factors

Price adjustments captured in the China PE market as buyers dial down their buying activities. A Chinese polyolefins producer contacted by SSESSMENTS.COM unveiled that the producer has made price adjustments on LLDPE Film C4. Offers for this grade were down between CNY100-150/ton ($14-21/ton). Meanwhile, a trader informed the latest offers for local HDPE grades generally decreased between CNY100-500/ton ($14-71/ton), except for HDPE Yarn. Similarly, offers for local LDPE Film and LLDPE Film C4 dropped by CNY100/ton ($14/ton) and CNY150/ton ($21/ton), respectively. All changes on the weekly comparison.

From import cargoes, the leading Indian petrochemical producer has resumed offering LLDPE Film C4 to China market this week after an absence for some time. The offers stood at $820-830/ton depending on the Melt Flow Index (MFI). The producer also expressed their intention to offer HDPE Yarn grade to Chinese buyers but have not found an agreement on the prices yet. Some buyers placed bids for HDPE Yarn at $870-880/ton but the producer could not accept, citing such a level is too low. From the trader’s side, market players informed SSESSMENTS.COM that price adjustment came from regular suppliers. HDPE Film and LDPE Film cargoes from a United Arab Emirates producer increased by $50/ton and $65/ton respectively compared to the price level available in early July, while the leading Saudi polyolefins producer maintained a stable offer level for HDPE Film, while LLDPE Film C4 were trimmed by $30/ton on the week-on-week comparison. In the meantime, import mLLDPE C6 offers from a Singaporean producer dropped by $10/ton compared to last week’s level, currently available at $1,060-1,100/ton. Similarly, the producer’s offers for LLDPE Film C4 decreased by $20/ton as compared to the same period, available at $890/ton. All import offers on LC at sight, CIF China Main Port basis. 

Since a downturn in the futures market from last week having an impact on market sentiment while import offers are still considered too high, sellers see most buyers keep procuring on a hand-to-mouth basis. Besides, the re-escalating tension between China and the U.S also hampered demand for PE resins this week. Overall, demand for HDPE Film and LDPE Film grades is still stronger as compared to LLDPE Film C4 as supported by lesser supply for both grades due to the delayed Iranian cargoes. On the production front, market sources informed SSESSMENTS.COM that Shanghai SECCO Petrochemical Co., Ltd halted production at its LLDPE plant with a production capacity of 300,000 tons/year. The plant will be closed temporarily for about ten days starting from July 28, 2020. As noted, the company also operates an HDPE plant with a capacity of 300,000 tons/year in the same complex at Shanghai Chemical Industry Park. On the supply side, as of Thursday morning, July 30, the inventory level of two leading Chinese polyolefins producers recorded at 640,000 tons, counted as the lowest level since Chinese New Year 2020 (January 25).

Looking ahead, market players pointed out there are three factors, which can drag PE prices down in the near future. First, most of the maintenance shutdowns have been finished from the domestic and foreign suppliers, hence, supply will be better in August. Second, delayed Iranian vessels which bring PE cargoes are expected to berth at China ports in August. Third, US origin PE cargoes also will arrive during that time. However, there are two positive factors that can maintain the current firm prices. Firstly, the inventory level of the two leading Chinese polyolefins producers is considered quite low, which can support local prices. Secondly, both new and restarting plants would not release massive volumes in August. As such, PE prices in the China market in August would only see some fluctuations within a limited range, SSESSMENTS.COM was told. Demand-wise, players hope to see better demand in mid-August or once the severe floods in several parts of China subside.

Local/localized PE offers on cash, EXW China basis (including 13% VAT in CNY term, excluding VAT in USD term)

OriginProductTransaction TypeOffers (CNY/ton)Equivalent in USD/ton
ChinaHDPE Blow MouldingPrice List7,100896
ChinaHDPE FilmOffer Given8,100-8,5001,023-1,073
ChinaHDPE FilmPrice List7,900998
ChinaHDPE Pipe (PE 100)Price List8,0001,010
ChinaHDPE YarnPrice List7,800-7,900985-998
ChinaLDPE FilmOffer Given8,500-8,8501,023-1,117
ChinaLDPE FilmPrice List8,450-8,5501,067-1,080
ChinaLLDPE Film C4Offer Given7,200-7,450909-941
ChinaLLDPE Film C4Price List7,050-7,200890-909

Import PE offers on LC at sight, CIF China Main Port basis

OriginProductTransaction TypeOffers (USD/ton)
Middle EastHDPE Blow MouldingOffer Received920
Far East AsiaHDPE FilmOffer Given950
Middle EastHDPE FilmOffer Given920-950
Middle EastHDPE FilmOffer Received910-960
Middle EastHDPE FilmPurchased910
Southeast AsiaHDPE FilmOffer Received950-960
Far East AsiaHDPE YarnPurchased920
Indian SubcontinentHDPE YarnBid Received870-880
Middle EastLDPE FilmOffer Given960-980
Middle EastLDPE FilmOffer Received975-1,000
Indian SubcontinentLLDPE Film C4Offer Given820-830
Indian SubcontinentLLDPE Film C4Offer Received820
Middle EastLLDPE Film C4Offer Given820-850
Middle EastLLDPE Film C4Offer Received830-850
Middle EastLLDPE Film C4Purchased830
Southeast AsiaLLDPE Film C4Offer Received890
Southeast AsiamLLDPE C6Offer Received1,060-1,100

Tags: Asia Pacific,China,English,NEA,PE,Weekly

Published on July 30, 2020 10:42 AM (GMT+8)
Last Updated on July 30, 2020 10:49 AM (GMT+8)