China’s local PP market remains bearish, PE still firm
According to ChemOrbis Price Index, local PP raffia prices recorded a decrease equivalent to $16/ton this week on average while the cumulative decrease of the past one month corresponds to a USD equivalence of $48/ton on average. As the impact of the G20 Summit waned and some plants returned from maintenance shutdowns, the PP market has felt pressure, particularly in the midst of unsatisfactory demand. The new regulation on transportation is also anticipated to exert pressure on demand as it will increase the transportation cost.
A trader commented, “Local PP prices have dropped further this week. Supply has improved after the G20 summit. Plus, September futures are expiring and there are more cargoes set to come into the market.” In terms of demand, he commented that it is not promising. “Local prices had increased considerably before and they have been exposed to a correction recently,” he added.
Another trader said, “Even though it is currently the high season for PP applications, buying interest remains weak both in the import and local market.” He is not certain about his expectations and therefore, takes a wait and see stance.
Unlike the PP market, the PE market remains on a firm note. According to ChemOrbis Price Index, local LDPE prices have shot up recently as they gained a USD equivalence of $20/ton this week while the cumulative gain of the past two months corresponds to a USD equivalence of $100/ton on average. The local LDPE market has been at a year-high based on ChemOrbis Price Index.
Meanwhile, LLDPE and HDPE film prices have tracked a stable to slightly firm path for the past one month.
“PE demand has been performing better than PP and LDPE demand has been showing the best performance due to ongoing supply constraints. Some producers delayed their start-ups, which must be because demand is not spectacular,” opined a trader.
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