China’s import polyolefin markets up on soaring crude, futures
Crude oil prices rallied to touch the highest levels since November 2014, according to the weekly average data from ChemOrbis Price Wizard, in the aftermath of the US administration’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA) with Iran and beginning the process of re-imposing sanctions.
LLDPE futures on the Dalian Commodity Exchange represented an increase of CNY235/ton ($37/ton) as of May 10 from a month ago, while PP futures indicated a CNY183/ton ($29/ton) gain over the same period.
Overall activity has been rather improved following players’ return from Chinaplas 2018 and Labor’s Day holiday along with relatively lower stocks on the part of domestic producers combined with some scheduled PP and PE turnarounds for June-July across Asia. The upward momentum boosted some demand despite the traditional low season for some PP and PE applications, according to players.
The import PE ranges posted weekly increases of $15-40/ton. A packager based in Shanghai received May PE prices with increases of $40-50/ton from a Saudi Arabian major. “The producer already sold out its May allocation amidst its tight HDPE availability,” the buyer said.
Import PP prices recorded hikes of $10/ton week over week. A PP trader in China affirmed the rebound and commented, “Stock levels at domestic polyolefin producers are considered normal while they are below the levels of late March which provided an upper hand to suppliers. Firmer spot propylene prices in Asia formed another supportive factor.”
Meanwhile, a few players adopted a more cautious stance towards the bullish trend. “The upcoming new capacities later this year may counterbalance the impact of planned maintenances for the summer to some extent. Plus, the depreciation of yuan against American dollar might weigh on demand for import PP and PE on the longer run,” they argued.
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