China PE Market Enters Holiday Mood, Local Prices On Opposite Trend
- China braces for second-wave of coronavirus outbreak
- Demand stayed on a downward trajectory due to traditional low season
- Shipment for import PE cargoes from Iran delayed due to new US sanctions
Chinese market players shared with SSESSMENTS.COM that China’s PE market has entered the holiday mood on Dragon Boat Festival, citing that the majority of market players in the country are away from their desks. In the domestic market, a local producer initiated a price increase of CNY75-100/ton ($10-14/ton) for LLDPE Film C4 from a week earlier, buoyed by tightness in the domestic supply and firmer feedstock prices. Similarly, offers for localized Iranian HDPE Film and LDPE Film cargoes moved higher between CNY50-100/ton ($7-14/ton) on a week-on-week basis, holding firm on the back of relatively tight supply. In contrast, some traders adjusted down their offers for local HDPE Film, LDPE Film, and LLDPE Film C4 cargoes by CNY50/ton ($7/ton) as compared to the same period following a downtrend in the futures market.
China import PE prices have gained some strength over the week, backed by firmer energy market and supply shortage. This week, several producers have announced July shipment offers to China market. As for Middle Eastern origin, a Saudi producer applied a hefty price increase of $90-100/ton for HDPE Film and $50-60/ton for LLDPE Film C4. Similarly, July shipment offers for LDPE Film and LLDPE Film C4 from a Qatari producer moved higher between $50-60/ton as compared to the same period. As for Far East Asia origin, July shipment offers from a South Korean producer increased between $50-70/ton for LLDPE Film C4 and HDPE Film and $80/ton for HDPE Yarn on a monthly comparison. Some producers managed to conclude deals at the initial offer level, while others were unable to secure any deals so far as most buyers show stiff resistance toward high offers. On a weekly basis, import PE offers of various origin were mostly between $10-50/ton higher.
China’s PE market was not bustling with activity in the early of this week, even though the Dragon Boat Festival draws closer. Market activity started to slow down as converters back to the sidelines ahead of the Dragon Boat Festival holiday, which falls on June 25 and lasts until June 27 this year. Besides, Beijing, the capital of China, is bracing for a second wave of coronavirus outbreak after a spike of new infections in the region, which forced the capital to impose a partial lockdown. Soaring numbers of infections have led to low purchasing power from the end-user segment, triggering a chain reaction of sluggish demand. Overall, downstream consumption in China market has shrunk due to the fallout from the coronavirus pandemic, coupled with the traditional low season. Considering the current market situation, converters are refrained from purchasing in bulk and prefer to procure on a hand-to-mouth basis. Supply in China PE market remains tight since mid-May as Chinese sellers start selling their cargoes to other countries after lockdown eased, coupled with maintenance season at local PE plants. As of Wednesday, June 24, SSESSMENTS.COM was informed that the inventory level of the two leading polyolefins producers in China recorded at 655,000 tons, posting a significant reduction of 100,000 tons from Monday's level. In the import market, shipment for PE cargoes from Iran which is a key PE supplier to China has been delayed due to new US sanctions.
For the near-term outlook, market sources in China voiced out to SSESSMENTS.COM that there would be room for PE prices to continue moving upward on the back of higher feedstocks prices and limited supply, but gains are likely to be capped by seasonal slowdown.
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 Film | Offer Given | 7,700-8,000 | 963-1,001 |
| Iran | HDPE Film | Offer Given | 8,000-8,100 | 1,001-1,013 |
| China | LDPE Film | Offer Given | 8,200-8,400 | 1,026-1,051 |
| Iran | LDPE Film | Offer Given | 8,500 | 1,063 |
| China | LLDPE Film C4 | Offer Given | 6,900-7,200 | 863-901 |
Import PE offers on LC at sight, CIF/CFR China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Delivery Term |
|---|
| Far East Asia | HDPE Film | Offer Received | 900-910 | CIF |
| Middle East | HDPE Film | Offer Received | 850-920 | CIF |
| Middle East | HDPE Film | Offer Given | 880 | CIF |
| Middle East | HDPE Film | Purchased | 850-860 | CIF |
| Southeast Asia | HDPE Film | Offer Given | 930 | CIF |
| Southeast Asia | HDPE Film | Offer Received | 930 | CIF |
| Far East Asia | HDPE Pipe (PE 100) | Offer Received | 940 | CIF |
| Southeast Asia | HDPE Pipe (PE 100) | Offer Given | 960 | CIF |
| Southeast Asia | HDPE Pipe (PE 100) | Offer Received | 960-970 | CIF |
| Far East Asia | HDPE Yarn | Offer Received | 860-900 | CIF |
| Far East Asia | HDPE Yarn | Purchased | 860 | CIF |
| Indian Subcontinent | HDPE Yarn | Price List | 845-865 | CFR |
| Southern Africa | LDPE Film | Offer Received | 900 | CIF |
| Middle East | LDPE Film | Offer Received | 910-915 | CIF |
| Southern Africa | LLDPE Film C4 | Offer Received | 775-780 | CIF |
| Far East Asia | LLDPE Film C4 | Bid Received | 805 | CIF |
| Far East Asia | LLDPE Film C4 | Offer Given | 855 | CIF |
| Far East Asia | LLDPE Film C4 | Offer Received | 830 | CIF |
| Middle East | LLDPE Film C4 | Offer Given | 830 | CIF |
| Middle East | LLDPE Film C4 | Offer Received | 800-830 | CIF |
| Middle East | LLDPE Film C4 | Purchased | 800 | CIF |
Description: *All offers for July shipment, except Indian origin cargoes
Tags: Asia Pacific,China,English,NEA,PE,Weekly
Published on June 25, 2020 1:29 PM (GMT+8)
Last Updated on June 25, 2020 3:35 PM (GMT+8)
