China’s local and import PE markets track divergent paths
LLDPE futures on the Dalian Commodity Exchange recorded a cumulative increase of $29/ton last week, except for slight losses of around $3-4/ton on Tuesday and Wednesday.
Although local PE prices remained unresponsive to these small gains until the start of this week, traders in China reported that the market has recently showed some modest gains despite buyers’ resistance. “However, this might be a short-lived recovery as futures are quite volatile this week,” they added.
“When compared to PP, LLDPE futures posted smaller increases and this is reflected on the market, with local PE prices posting only slight gains. The PE sentiment remains weak while most players are taking a cautious stance due to the recent floods,” commented a trader.
The overall supply levels of CNPC and Sinopec remained below 800,000 tons, players noted.
A second trader added, “The recent gains in prices are triggered by higher futures, rather than real demand. Buyers are limiting their purchases according to their urgent needs given the low season. We believe that the market might turn soft again as soon as futures take their support away.”
As for the import market, prices continued to track a stable to softer path given the ongoing pressure from competitive offers for Iranian, Brazilian and US cargoes. Plus, restarting plants and new capacities to start up in China, India, the US and Iran are also weighing down on the market.
The overall ranges for import PE prices were quoted at $1080-1140/ton for LDPE film, at $1000-1070/ton for LLDPE film and at $1020-1118/ton for HDPE film, all on CIF, cash equivalent basis, showing a stable to $10-30/ton lower trend from a week earlier.
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