China’s local PP, PVC prices pushed up by futures, PE remains unresponsive
However, the futures market does not seem to be able to set the tone of the country’s local PE market. This is because the PE market feels more pressure from the influx of Iranian PE cargoes and the start up of new capacities globally in the second half of this year.
On the Dalian Commodity Exchange, September PP and PVC futures recorded weekly increases of CNY326/ton ($48/ton) and CNY430/ton ($63/ton), respectively as of June 29 while September LLDPE futures posted relatively smaller gain of CNY285/ton ($42/ton) within the same period.
Regarding the reflection of these gains onto local prices, the largest hike attempts have been seen in the local PVC market especially for acetylene-based offers where prices have moved up by around $30/ton on a weekly basis while ethylene-based PVC offers have inched up by $5-10/ton from a week earlier.
Local PP prices have also followed suit with offers being reported $10/ton higher compared to the last week’s range whereas offers for local PE grades have witnessed weekly declines up to $70/ton so far this week.
Upon the recent increases in their local markets, Chinese PP, PVC and PE players are approaching the markets cautiously amidst the weak energy complex and thin buying interest.
“This week, local PVC prices have moved up especially for carbide-based PVC. Ethylene-based PVC prices have also increased given higher futures. However, demand did not pick up following the price increases. If demand remains unresponsive, prices might undergo correction in the short term,” commented a trader.
A PVC buyer confirmed the firming offers, although they expect prices to face a correction, but they are just not sure when.
A Xinjiang based trader said, “This week, China’s local PP have posted some increases on the back of increasing futures despite the ongoing weakness in demand. Meanwhile, PE prices have shrugged off the higher LLDPE futures.”
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