Unsupportive Demand Led To Gloomy Outlook For PE Pricing In China
- Local and import PE offers captured in a diverse trend
- Market sentiment remains unchanged
- Market outlook remains pessimistic
Market sources expressed an opinion to SSESSMENTS.COM that the unsupportive demand is leading to a gloomy outlook for PE pricing in China. On May 11, the offers for local HDPE Film captured lower by CNY100/ton ($14/ton) from Friday’s level owing to the drop in the futures prices. On the same day, a trader decided to increase the offers for HDPE Film by CNY100/ton ($14/ton) and by CNY200/ton ($28/ton) for HDPE Pipe (PE 100) and HDPE Yarn grades compared to last Friday’s level. While for HDPE Blow Moulding, the offers were kept stable compared to the same period. However, the trader decided to make another adjustment on May 13. Compared to Monday’s level, the offers for HDPE Yarn decreased by CNY200/ton ($28/ton) while HDPE Pipe (PE 100) increased by CNY100/ton ($14/ton). For HDPE Film and HDPE Blow Moulding, the offers were kept stable from Monday. Sources added that the offers for localized Iranian HDPE Film cargoes also edged lower between CNY100-150/ton ($14-21/ton) from a week earlier. From the import market, on May 11, the offers for HDPE Film and HDPE Yarn from a Thai PE producer surfaced with an increment of $10/ton from last week, yet the offers for HDPE Film were readjusted by $10/ton lower on May 12 compared to the previous offers announced on May 11. Furthermore, the offers for HDPE Film from the leading Saudi polyolefins producer captured stable compared to the offer level before the holiday. While offers for US HDPE Film cargoes recorded at $10/ton higher from last week citing satisfactory sales.
Following the decreases in the futures market, SSESSMENTS.COM noted the local offers for LDPE Film and LLDPE Film C4 from the traders’ end decreased by CNY100/ton ($14/ton) on Monday, May 11 compared to Friday’s level. Compared to the same period, a trader decided to reduce the offers for LDPE Film by CNY150/ton ($21/ton) and kept the offers for LLDPE Film C4 stable. However, on May 13, the trader adjusted the offers for LDPE Film and LLDPE Film C4 by CNY100/ton ($14/ton) and between CNY150-300/ton ($21-42/ton) lower respectively from Monday’s level. From the import market, on May 11, a Thai PE producer increased the offers for LLDPE Film C4 by $10/ton on a weekly comparison. Later on May 12, the offers for LLDPE Film C4 adjusted lower by $10/ton citing lukewarm responses from buyers. For mLLDPE C6, the latest offers from the Thai producer captured at $920/ton on LC at sight, CIF China Main Port basis, which is $95/ton lower from the offers announced on Monday, May 11. For Indian cargoes, sources revealed that the offers for LDPE Film and LLDPE Film C4 trimmed by $10/ton and $20/ton respectively over the week. Meanwhile, the offers for import LDPE Film and LLDPE Film cargoes from the leading Saudi polyolefins producer were $10/ton and $20/ton respectively higher from the offers before Labor Day holiday. Likewise, the offers LLDPE Film C4 of US origin also captured higher by $10/ton from last week owing to the satisfactory sales.
According to market sources report to SSESSMENTS.COM, PE demand is softer than last week as players prefer the sidelines position due to the decreases in futures prices at the beginning of the week. Moreover, China’s economy highly depends on the export of finished goods. However, due to the outbreak, orders from the export markets are limited and the consumption for plastic products decreases significantly. On the supply side, the inventory of the two leading Chinese polyolefins producers recorded at 880,000 tons as of Thursday morning. Compared to Monday’s level, the inventory decreased by 60,000 tons.
For the outlook, market sources opined to SSESSMENTS.COM that import PE price increment will be less likely to sustain as domestic demand has yet to fully recuperate. Although the market is gradually improving, it will take a while for the market to be fully recovered as export demand remains sluggish. However, other sources predict that import PE offers will remain firm in the near term as Middle Eastern producers have limited allocation due to the Ramadhan as well as Eid Al-Fitr holiday.
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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 | 7,100-7,300 | 886-911 |
| USA | HDPE Blow Moulding | Offer Given | 6,650 | 830 |
| China | HDPE Film | Offer Given | 7,000-7,300 | 873-911 |
| China | HDPE Film | Price List | 7,600 | 948 |
| Iran | HDPE Film | Offer Given | 7,200-7,300 | 898-911 |
| Middle East | HDPE Film | Offer Given | 7,400-7,500 | 923-936 |
| China | HDPE Pipe (PE 100) | Price List | 8,700-8,800 | 1,086-1,098 |
| China | HDPE Yarn | Price List | 6,800-7,000 | 849-873 |
| China | LDPE Film | Offer Given | 7,100-7,450 | 886-930 |
| China | LDPE Film | Price List | 7,200-7,600 | 898-948 |
| Iran | LDPE Film | Offer Given | 7,000 | 873 |
| Middle East | LDPE Film | Offer Given | 7,800 | 973 |
| China | LLDPE Film C4 | Offer Given | 6,400-6,600 | 799-824 |
| China | LLDPE Film C4 | Price List | 6,400-6,500 | 799-811 |
| Iran | LLDPE Film C4 | Offer Given | 6,400-6,500 | 799-811 |
| Middle East | LLDPE Film C4 | Offer Given | 6,800-6,820 | 849-851 |
| China | LLDPE Film C4 (CTO) | Offer Given | 6,300-6,400 | 786-799 |
Import PE offers, CIF China Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) | Payment Term |
|---|
| Middle East | HDPE Blow Moulding | Offer Given | 810 | LC at sight |
| Middle East | HDPE Blow Moulding | Offer Received | 740-750 | LC at sight |
| Middle East | HDPE Blow Moulding | Sell Idea | 770 | LC at sight |
| Middle East | HDPE Film | Offer Given | 760-820 | LC at sight |
| Middle East | HDPE Film | Offer Received | 820 | LC at sight |
| North America | HDPE Film | Offer Received | 755 | LC 90 days |
| Southeast Asia | HDPE Film | Offer Given | 810 | LC at sight |
| Southeast Asia | HDPE Film | Offer Received | 820 | LC at sight |
| Southeast Asia | HDPE Film | Sold | 810 | LC at sight |
| Southeast Asia | HDPE Yarn | Offer Received | 790 | LC at sight |
| Indian Subcontinent | LDPE Film | Offer Given | 800 | LC at sight |
| Middle East | LDPE Film | Offer Given | 820-860 | LC at sight |
| Middle East | LDPE Film | Offer Received | 820-860 | LC at sight |
| Southeast Asia | LDPE Film | Offer Received | 900 | LC at sight |
| Indian Subcontinent | LLDPE Film C4 | Offer Given | 700 | LC at sight |
| Middle East | LLDPE Film C4 | Offer Given | 730-780 | LC at sight |
| Middle East | LLDPE Film C4 | Offer Received | 740-780 | LC at sight |
| North America | LLDPE Film C4 | Offer Received | 730-740 | LC 90 days |
| Southeast Asia | LLDPE Film C4 | Offer Given | 790 | LC at sight |
| Southeast Asia | LLDPE Film C4 | Offer Received | 800 | LC at sight |
| Southeast Asia | mLLDPE C6 | Offer Given | 900-920 | LC at sight |
| Southeast Asia | mLLDPE C6 | Offer Received | 920-1,015* | LC at sight |
| Southeast Asia | mLLDPE C6 | Sold | 900 | LC at sight |
Description: *Offers on Monday 11, before adjustment
Tags: Asia Pacific,China,English,NEA,PE,Weekly
Published on May 14, 2020 2:10 PM (GMT+8)
Last Updated on May 14, 2020 2:10 PM (GMT+8)
