Higher costs, rising demand carry import LDPE prices to a 5-month high in China
Whilst the lingering tightness for LDPE grade has remained the main driver of the bullish market, rising demand with active replenishment in the pre-National Day holiday in October, as well as stronger energy values, have also contributed to the recent round of gains.
The overall range for import LDPE prices on CIF China basis has been assessed $20-30/ton higher from last week at $1440-1520/ton recently.
Higher demand for packaging
Market players have reported recently that demand for packaging requirements has been firmer with rising replenishment activities ahead of the long holiday in early October and this has reflected on LDPE prices.
“On the demand front, LDPE has remained the strongest due to the growing need for packaging requirements. Moreover, cost support for PE prices has been there with crude oil prices hitting three-year highs recently. The recent implementation of the dual control policy, has begun to spread and affect more provinces including Jiangsu, Guangdong, and Zhejiang. Operating rates of coal-based plants are expected to drop further, resulting in reduced supply,” a trader commented.
Elaborating further, he added, “As for the near term, we think prices may move sideways as the market needs to digest the recent hikes first.”
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