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Firming falters in China’s PE market amid balanced supply-demand

  • 20/07/2016 (07:16)
Following an upturn of more than one month triggered by futures prices, China’s PE market has turned to a stable to soft note recently. The sentiment faltered upon the fluctuations of crude oil as well as lower future prices. Players in China reported modest decreases in the local market while competitive offers are also emerging in the import market these days.

In terms of supply-demand balance, availability neither in the local market nor in the import market is said to be comfortable. Traders have also been reporting limited supplies from the Middle East for the past few weeks. Production was already lower due to Ramadan and the Eid holiday as well as some production problems, some argued.

Supply is generally deemed as balanced with sluggish demand. “Demand has been weak and therefore, reduced supplies are not creating a problem for now in the PE market,” said a trader.

However, there are expectations of seeing an improvement in demand in the weeks ahead in line with the anticipated start of the season for agricultural film. “If demand starts for agricultural film in August, there is not much supply for LDPE and LLDPE in the local market,” said a distributor.

Another distributor said, “Some agricultural film converters have started their production recently, although they are buying on a needs only basis for now.”
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