China’s local PE, PP markets move back down on softer futures
The recent softening was mostly attributed to retreating PP and LLDPE futures on the Dalian Commodity Exchange, posting respective decreases of $51/ton and $55/ton on a weekly basis as of October31. Weakening demand as well as increasing local inventories weighed down on the local sentiment, players also concur.
A trader commented, “Our offers for local PP and PE came down by around CNY50-100/ton ($8-15/ton) this week given softer futures. Demand is weak, mostly limited to buyers’ needs and the number of done deals is rare. Local producers’ CNPC and Sinopec’s latest inventory levels slightly increased to 710,000 tons recently; and we think they will continue to increase in the days ahead.”
Another trader commented, “We think the softening PE trend that kicked off this week will continue in the days ahead as prices have already reached their peak levels in the past weeks. There is a lack of support from demand as well since the prevailing levels are still deemed too high.”
Meanwhile, HDPE film offers continued to find support from the ongoing tightness and witnessed relatively smaller decreases than LDPE and LLDPE film offers.
A Shanghai-based trader opined, “Supplies are still tight for HDPE. Local producers are producing more HDPE pipe and this causes further supply issues for HDPE film and blow moulding grades. We think the factor that prevents decreases on import HDPE offers is also supply tightness.”
In China, prices for local homo-PP raffia have softened by $14-27/ton so far this week while PE offers are down by $47/ton LDPE film, $40/ton for LLDPE film and by $21-40/ton for HDPE film.
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