Adjusted Offers Came As PE Market In China Exposed To Monomer Price Movements And Inventory Level
- Buyers showing resistance towards local, localized PE cargoes priced above a certain level
- PE prices supported by low inventory levels and firm monomer prices
- Pricing outlook could change depends on end-product demand and incoming import cargoes
Latest domestic and import offers from producers appear with some changes as the China PE market is susceptible by some factors. As compared to the price list received on Friday, June 12, local PE and PP prices this week maintained stable, with exceptions for some grades. HDPE Yarn and LLDPE Film C4 moved up between CNY50-150/ton ($7-21/ton). In contrast, offers for HDPE Pipe (PE 100) decreased by CNY150/ton ($21/ton). A global trading house then informed that offers for localized LLDPE Film C4 cargoes from the leading Saudi polyolefins producer stood at CNY7,120/ton ($1,004/ton) on cash, EXW China basis and including 13% VAT, increased by CNY20/ton ($2/ton) as compared to the same period. SSESSMENTS.COM was told that the upswing in localized offers was owing to the depreciation of Chinese Yuan against the US Dollar. From the import market, offers for PE cargoes from the Middle Eastern producers remained stable from last week with HDPE Film being offered at $840-860/ton and LDPE Film at $880-900/ton, while LLDPE Film C4 at $790-800/ton. All import offers on LC at sight, CIF China Main Port basis.
Demand-wise, market players shared that now the fundamental demand for PE exists in China. As of Wednesday morning, the inventory level of the two leading polyolefins producers in China recorded at 695,000 tons, decreased significantly by 125,000 tons from Monday's level, while monomer prices remain firm. As such, local prices remain high with slight upward adjustments. However, most buyers were showing resistance towards the offers above CNY7,000/ton ($987/ton)-level, hence, unwilling to make purchases or only buying on a hand-to-mouth basis. Market players also told SSESSMENTS.COM that supply remains limited since mid-May when ethylene and propylene prices were hiked as well as other countries have gradually resumed their businesses following coronavirus lockdown. Following the market's general notion, domestic scarcity triggered as China is no longer limited to consuming after lockdown eased, Chinese sellers start selling their cargoes to other regions as well.
Looking ahead, some traders mentioned that buying sentiment for resins and the digestion rate for finished goods will affect the price movements. SSESSMENTS.COM noted with the increased cost of monomers, the cost of polyolefins will increase as well. Higher PE prices then will shore up in the market if buyers can get orders from end-users to make profits. Otherwise, lack of support from demand will push the upstream producers to adjust down the operating rate causing tightness in supply. Most market players then foresee the possibility for PE prices to go down once imported materials arrive at China ports, coupled with additional capacity from the new plants that are expected to start production by July.
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 | 7,500 | 936 |
| China | HDPE Film | Offer Given | 7,500-7,700 | 936-961 |
| Iran | HDPE Film | Offer Given | 7,850-8,100 | 979-1,011 |
| China | HDPE Film | Price List | 7,600 | 948 |
| China | HDPE Pipe (PE 100) | Price List | 7,950 | 992 |
| China | HDPE Yarn | Price List | 7,100-7,300 | 886-911 |
| China | LDPE Film | Offer Given | 7,800 | 973 |
| Iran | LDPE Film | Offer Given | 8,000 | 998 |
| China | LDPE Film | Price List | 7,800-8,000 | 973-998 |
| China | LLDPE Film C4 | Offer Given | 6,700-7,100 | 836-886 |
| Qatar | LLDPE Film C4 | Offer Received | 7,030 | 877 |
| Saudi Arabia | LLDPE Film C4 | Offer Received | 7,120 | 888 |
| China | LLDPE Film C4 | Price List | 6,900-7,050 | 861-879 |
| China | LLDPE Film C4 (CTO)* | Sold | 6,700-6,740 | 836-841 |
Description: *CTO = coal-based materials
Import PE offers on CIF China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Payment Term |
|---|
| Middle East | HDPE Film | Offer Given | 840-860 | LC at sight |
| Middle East | HDPE Film | Offer Received | 850-870 | LC at sight |
| North America | HDPE Film | Offer Given | 820-830 | TT |
| Far East Asia | HDPE Film | Offer Given | 870* | LC 90 days |
| Far East Asia | HDPE Film | Sold | 870* | LC 90 days |
| Southeast Asia | HDPE Film | Offer Received | 900** | LC at sight |
| Southeast Asia | HDPE Film | Sold | 850 | LC at sight |
| Southeast Asia | HDPE Pipe (PE 100) | Offer Received | 930** | LC at sight |
| Southeast Asia | HDPE Yarn | Offer Received | 850-860** | LC at sight |
| Middle East | LDPE Film | Offer Given | 880-900 | LC at sight |
| Middle East | LDPE Film | Offer Received | 885-910 | LC at sight |
| Middle East | LLDPE Film C4 | Offer Given | 790-800 | LC at sight |
| Middle East | LLDPE Film C4 | Offer Received | 800-810 | LC at sight |
| North America | LLDPE Film C4 | Offer Received | 800 | LC at sight |
| Southeast Asia | mLLDPE C6 | Offer Received | 930** | LC at sight |
Description: *July shipment; **Late July shipment
Tags: Asia Pacific,China,English,NEA,PE,Weekly
Published on June 18, 2020 12:27 PM (GMT+8)
Last Updated on June 23, 2020 4:38 PM (GMT+8)
