Chinese Market Players: Buyers’ Resistance Impede Local PE Prices To Shine
- Low inventory and firmer feedstocks prices propped up local PE offers
- Demand began to vapid as buyers showed stiff resistance toward high prices
- Players opined that upcoming arrival of import cargoes will depress local PE prices
Chinese market players contacted by SSESSMENTS.COM cited that buyers’ resistance has impeded local PE prices to shine. On the week commencing June 8, local offers for all PE grades from the majority of Chinese traders were on a stable level on a weekly comparison. At the moment, only offers for local HDPE Pipe (PE 100) from a trader showed a downturn with a cumulative adjustment applied between CNY100-200/ton ($14-28/ton) within this week. Also offers for local HDPE Blow Moulding from another trader captured down between CNY50-100/ton ($7-14/ton) over the week. Most traders are able to maintain their offers stable as supported by the low inventory level of local producers coupled with firmer feedstock prices. For localized cargoes, offers for Iranian HDPE Film and LDPE Film cargoes lowered between CNY50-100/ton ($7-14/ton) as compared to a week earlier.
Unlike local PE offers, SSESSMENTS.COM noted that offers in the import market were mostly captured on an uptrend this week. From the Middle East, the latest offers for HDPE Film, LDPE Film and LLDPE Film C4 from the leading Saudi polyolefins producer surfaced in the China market with an increase of $10/ton on a weekly comparison. As usual, the producer provides room for negotiation, with acceptable sell idea at $30/ton lower from the initial offers for HDPE Film and LLDPE Film C4, by $40/ton lower from the initial offer level for LDPE Film. Likewise, from Southeast Asia, August shipment offers from a Thai PE producer to the China market emerged with an increment of $30/ton for HDPE Film and $20/ton for LLDPE Film C4. Both changes were on a weekly interval. However, for the Thai cargoes, some traders pointed out that the offers are the least workable one since such a level is deemed too high, on the other side, most converters now prefer prompt delivery cargoes rather than forward basis amid market uncertainties.
Speaking of demand, buying sentiment for PE resins in the domestic market began to vapid this week. Some buyers are now waiting on the sidelines as most of them are objecting toward lofty prices. But on the other front, several traders said that some deals may be achieved this week as a few converters still have relatively low inventory on their hands. Still, the buying pattern remains on a hand-to-mouth basis. On the supply side, the inventory of the two leading Chinese polyolefins producers recorded at 740,000 tons as of Thursday morning, June 11. As SSESSMENTS.COM noted, the inventory decreased as much as 100,000 tons compared to Monday’s level, June 8.
In the near term, some players doubted that local PE prices would hike again since buyers started to show refusal toward high prices. However, local PE prices should be able to remain stable as low inventory level of local producers and firmer ethylene prices provide support. Yet in the long term, some players believe that PE prices will eventually be dragged down by the upcoming of several hundred thousands of imported cargoes, including from the US and India. These cargoes reportedly will arrive in China ports at the end of June or early June. Demand-wise, market players opined to SSESSMENTS.COM that domestic demand will gradually pick up following the economic recovery in China and other countries.
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 | Offer Given | 7,400-7,800 | 926-976 |
| China | HDPE Blow Moulding | Price List | 7,500 | 939 |
| Russia | HDPE Blow Moulding | Sold | 7,100 | 889 |
| China | HDPE Film | Offer Given | 7,500-7,850 | 939-982 |
| China | HDPE Film | Price List | 7,600 | 951 |
| Iran | HDPE Film | Offer Given | 7,600-7,800 | 951-976 |
| Iran | HDPE Film | Sold | 7,500-7,600 | 939-951 |
| Russia | HDPE Film | Sold | 7,200 | 901 |
| China | HDPE Pipe (PE 100) | Price List | 8,100 | 1,014 |
| China | HDPE Yarn | Price List | 7,100-7,200 | 889-901 |
| China | LDPE Film | Offer Given | 7,700-8,100 | 964-1,014 |
| China | LDPE Film | Price List | 7,800-8,000 | 976-1,001 |
| Iran | LDPE Film | Offer Given | 7,900 | 989 |
| Iran | LDPE Film | Sold | 7,900 | 989 |
| China | LLDPE Film C4 | Offer Given | 6,700-7,000 | 838-876 |
| China | LLDPE Film C4 | Price List | 6,750-7,000 | 845-876 |
| Saudi | LLDPE Film C4 | Offer Received | 7,100 | 889 |
Import PE offers on LC at sight, CIF China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| Middle East | HDPE Blow Moulding | Offer Received | 880-920 |
| Middle East | HDPE Blow Moulding | Sold | 855 |
| Middle East | HDPE Film | Offer Given | 820-860 |
| Middle East | HDPE Film | Offer Received | 850-860 |
| Middle East | HDPE Film | Sell Idea | 830-840 |
| North America | HDPE Film | Offer Given | 820 |
| Southeast Asia | HDPE Film | Offer Given | 895*-900 |
| Southeast Asia | HDPE Film | Offer Received | 895 |
| Southeast Asia | HDPE Pipe (PE 100) | Offer Given | 980 |
| Middle East | LDPE Film | Offer Given | 850-910 |
| Middle East | LDPE Film | Offer Received | 885-910 |
| Middle East | LDPE Film | Sold | 870 |
| Southern Africa | LDPE Film | Purchased | 860 |
| Middle East | LLDPE Film C4 | Offer Given | 750-810 |
| Middle East | LLDPE Film C4 | Offer Received | 810 |
| Middle East | LLDPE Film C4 | Sell Idea | 780 |
| Southeast Asia | LLDPE Film C4 | Offer Given | 855-860 |
| Southeast Asia | LLDPE Film C4 | Offer Received | 855* |
| Southern Africa | LLDPE Film C4 | Purchased | 755 |
| Southeast Asia | mLLDPE C6 | Offer Given | 930 |
Description: *Offers for August shipment
Tags: Asia Pacific,China,English,NEA,PE,Weekly
Published on June 11, 2020 1:48 PM (GMT+8)
Last Updated on June 11, 2020 1:48 PM (GMT+8)
