China’s PP, PE markets enter holiday amid soft sentiment
Import PP prices witnessed visible price decreases by the middle of the month, yielding to the pressure from the local market, where local prices steadily fell throughout September. This week, there was not much change reported in prices both in the import and local markets, although traders and buyers continue to highlight that demand remains thin and supplies are comfortable across the country.
In the PE market, the ongoing tightness of LDPE keeps prices firm for this product. Stock replenishment ahead of the holiday also occurred this week, mostly from the local market. Buying interest for imports was rather limited, many traders concurred. A Thai producer as well as several traders admitted stepping back from their initial offers for October, conceding to discounts this week. “Even after we revised our offers down, it is still hard to conclude deals in the import market,” commented a producer source.
Regarding what will unfold in the markets in the post-holiday period, a soft sentiment largely prevails in the PP market. This is attributed to expectations of increased supplies as new capacities come online inside the country and due to available cargoes from the futures market, upon expiration of the September contracts.
As for PE, post-holiday expectations are not as weak as they are in the PP market. Some still highlight the supply issues, for LDPE in particular, that may keep the market sentiment firm as well as the possibility of higher crude prices after the OPEC decision. However, more players are on the softening side given the fact that new start-ups as well as returning plants will ease supply concerns while demand has already been unspectacular.
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