China PP, PE prices continue to succumb to poor demand, rising import supply

The downward trajectory in China’s PP and PE markets that kicked off in early April has continued this week. Demand has shown no signs of recovery despite the imminent start of the seasonality. The markets have almost only one supportive factor, which is low supplies at home amid producers’ reduced run rates. Apparently, that has also been outweighed by the rising import availability.

CIF raffia and injection prices sink to 2-year low

ChemOrbis Price Index shows that the weekly average data of CIF homo-PP raffia and injection prices have fallen to $925/ton recently, the lowest level since late August 2020.




A trader reported concluding deals for South Korean raffia at $920/ton CIF, affirming overseas suppliers’ focus on the China markets due to the lack of demand from other export outlets amid global economic challenges. His offers for the India and Middle East origin raffia were standing at $920/ton and $930-940/ton CIF, respectively.

He commented, “Demand remains thin amid the downtrend. Not only the ongoing covid restrictions but also the recent heat wave, which has limited downstream operating rates, has been denting demand further. For supply, potential support from low supplies at home is offset by the rising import supply at competitive levels. We think that the near-term market will continue to be weak even if the peak season is approaching.”

LDPE film sees larger decreases than HD, LLDPE film

As ChemOrbis data show, import LDPE film prices have witnessed larger decreases than import LLDPE and HDPE film prices during this 5-month downtrend, erasing their earlier gains.

LDPE capacity has increased at home due to fewer turnarounds and more capacity additions. Moreover, most producers have preferred to cut their production rates for HDPE and LLDPE rather than LDPE. The expected increase in import LDPE supply to China in the second half of the year has also contributed to these comparatively faster losses, along with the weak demand for agricultural use.




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US LDPE film deal reported below $1100 CIF mark

ChemOrbis data also show that import LDPE film prices below $1100/ton have appeared this week for India, Iran, and the Middle East origins, while a trader reported selling US LDPE film at $1080/ton CIF. Late September 2020 was the last time LDPE film offers below this threshold were reported, meanwhile.

He said, “The impact of the peak season is yet to be felt in the market. Factory orders are further dented by energy curbs, forcing downstream players to run their plants at lower rates. Pandemic-related lockdowns, increased supply pressure from overseas markets particularly the rising presence of US cargoes, as well as new plant start-ups, are also impinging the market sentiment.”