Current Local Inventory Level And Monomer Prices Caused Adjustments On PE Offers
- Most significant adjustments were applied on offers for local LDPE Film
- Buyers only show interest in prompt delivery cargoes
- Import and local PE prices in China will remain firm during June, trend will shift in July
SSESSMENTS.COM was informed that the current low inventory level of local producers coupled with firmer monomer prices caused adjustments on local PE offers in China. Local and localized PE offers across all grades were on an uptrend this week. The increases for local offers in the market were between CNY50-200/ton ($7-28/ton) while for localized PE cargoes from Saudi by CNY50/ton ($7/ton). However, upward adjustments applied by a local trader in the country were more significant for some grades whereas some grades were kept unchanged. HDPE Film and HDPE Yarn offers from the trader were stable. The changes were on a weekly comparison. For HDPE Blow Moulding and HDPE Pipe (PE 100), the total increases applied by the trader this week was CNY200-400/ton ($28-56/ton) and CNY100/ton ($14/ton), respectively. Meanwhile, the cumulative adjustments for LDPE Film was between CNY350-550/ton ($49-77/ton) and for LLDPE Film C4 between CNY200-250/ton ($28-35/ton).
Similar to local prices, SSESSMENTS.COM noted that import offers for most PE grades to China were also captured higher this week. Offers for HDPE Film and LLDPE Film C4 from Saudi increased by $30/ton from a month ago. Offers for the same products from a Thai PE producer were adjusted up by $40/ton and $35/ton respectively on a biweekly comparison. The producer has no offers for LDPE Film to China this week. Meanwhile, offers for mLLDPE C6 from the producer were stable from last week. Likewise, offers for HDPE Pipe (100) of Saudi origin were also unchanged compared to the same period.
Pertaining to demand, market players commented to SSESSMENTS.COM that demand from converters is ongoing, but as the speed of price increases is beyond the speed of demand improvement, overall volume purchased was not much. For import cargoes, buyers only show interest in prompt delivery cargoes, especially for cargoes that are already in bonded warehouses at the port. Buyers resist cargoes for late June and July shipment to anticipate the traditional low season for PE in July and August. On the supply side, market players reported that the inventory of local producers is low. Likewise, most traders have limited inventory since imported cargoes have not arrived yet. The inventory level of the major Chinese polyolefins producers stood at 730,000 ton as of Thursday morning, a decrease of 95,000 tons from Monday’s level.
Market players contacted by SSESSMENTS.COM predict that during June, import and local PE prices in China will remain firm. The leading Saudi polyolefins producer indicated that offers to China next week will increase between $10-20/ton. As for demand, due to business reopening in other countries, sales for end-products to the export market will improve and in turn, will lead to improvement in PE demand in China. However, entering July to August, the players believe that demand will decline and PE prices will have to move lower following the traditional pattern.
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Local/localized PE offers on cash, EXW China basis (including 13% VAT in CNY term, excluding VAT in USD term)
| Origin | Product | Transaction Type | Offers (CNY/ton) | Equivalent in USD/ton |
|---|
| China | HDPE Blow Moulding | Price List | 7,400-7,500 | 920-933 |
| China | HDPE Film | Offer Given | 7,400-7,450 | 920-927 |
| China | HDPE Film | Price List | 7,500-7600 | 933-945 |
| Saudi | HDPE Film | Offer Given | 7,500 | 933 |
| Thailand | HDPE Film | Offer Given | 7,800-7,850 | 970-976 |
| China | HDPE Pipe (PE 100) | Price List | 8,200-8,300 | 1,020-1,032 |
| China | HDPE Yarn | Price List | 7,000-7,100 | 871-883 |
| China | LDPE Film | Offer Given | 7,500-7,550 | 933-939 |
| China | LDPE Film | Price List | 7,500-8,000 | 933-995 |
| Saudi | LDPE Film | Offer Given | 7,800-7,900 | 970-983 |
| China | LLDPE Film C4 | Offer Given | 6,650-6,750 | 827-840 |
| China | LLDPE Film C4 | Price List | 6,700-7,000 | 833-871 |
| Saudi | LLDPE Film C4 | Offer Given | 7,000-7,200 | 871-896 |
Import PE offers on LC at sight, CIF China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| Middle East | HDPE Film | Offer Given | 780-810 |
| Middle East | HDPE Film | Offer Received | 750 |
| Middle East | HDPE Film | Sell Idea | 850-860 |
| Southeast Asia | HDPE Film | Offer Given | 860 |
| Middle East | HDPE Pipe (PE 100) | Offer Given | 950-960 |
| Middle East | HDPE Pipe (PE 100) | Sold | 950-960 |
| Middle East | LDPE Film | Offer Given | 820-840 |
| Middle East | LDPE Film | Sell Idea | 880-890 |
| Middle East | LDPE Film | Sold | 855 |
| Indian Subcontinent | LLDPE Film C4 | Offer Received | 740 |
| Middle East | LLDPE Film C4 | Offer Given | 740-770 |
| Middle East | LLDPE Film C4 | Offer Received | 740 |
| Middle East | LLDPE Film C4 | Sell Idea | 790-800 |
| Southeast Asia | LLDPE Film C4 | Offer Given | 835 |
| Southeast Asia | mLLDPE C6 | Offer Given | 930 |
Tags: Asia Pacific,China,English,NEA,PE,Weekly
Published on June 4, 2020 1:40 PM (GMT+8)
Last Updated on June 4, 2020 4:21 PM (GMT+8)
