Import LLDPE film prices in China, SEA pulled down from nearly 1-year highs

Import LLDPE film prices in China and Southeast Asia have reversed course following a three-month upturn. Data obtained from ChemOrbis Price Index illustrates that the weekly averages of import LLDPE film prices in both markets dropped from their nearly-one-year highs in the week ending on March 8.



China’s low ends occupied by lower offers for various origins

Over the week ending on March 8, market participants reported a series of lower offers from the Middle East, India, and US at $930-940/ton CIF China, cash, forming the low ends of the assessment range. Overall, import LLDPE film prices for all origins were assessed at $930-1010/ton CIF China, cash, indicating rollovers to decreases of $20/ton when compared to the previous week.

Offers from the Middle East were also stable on the high end and $20/ton lower on the low end, at $930-980/ton on the same terms. Some shipments of Middle Eastern LLDPE film were traded at par with US materials.

Saudi materials experienced downward adjustments in SEA

During the same week, import LLDPE film prices for all origins were assessed stable to $30/ton lower from the previous week at $990-1060/ton CIF SEA, cash. Mid-Eastern origins saw the prices sliding by $10-20/ton on both ends to $1010-1060/ton on the same term.

Meanwhile, a major Saudi Arabian producer offered some discounts for March LLDPE film shipments sold in Vietnam after announcing initial offers with rollovers. The producer concluded deals for March LLDPE film at $1010-1020/ton CIF Vietnam, cash, while their initial offers were quoted at $1080-1090/ton on a similar basis, according to traders.

What lied behind the latest downswings?

A double whammy of increased supply and limited demand mainly cast a shadow over the import LLDPE film market across Asia, making it the weakest among the three main PE film grades.

A Chinese trader reported, “Costs remain a price driver, while the advantages of reduced imports are gradually becoming evident. However, the LLDPE film grade has still been affected significantly by inventory pressure.”

Along with a supply overhang, a weak buying appetite and buyers’ stiff resistance were also attributed to the decline. That was because demand from end users across both regions has remained tepid, and prices of finished goods have yet to catch up with the uptrend in PE raw materials. Appealing local prices also trimmed buyers’ interest in imports, meanwhile.

“Despite higher costs, LLDPE film has seen some discounts, as demand is sluggish and buyers resist higher offer levels,” commented another trader based in Vietnam.

Lower prices raised concerns over downtrend

Being under supply-demand pressure, LLDPE film markets have become vulnerable to a further downslide. This inevitably dampens sentiment among buyers, prompting them to take a wait-and-see approach and potentially having a spillover impact on other grades.

“The decreases in LLDPE offers from a major Saudi Arabian producer have created concerns over a downtrend among players. The producer hasn’t issued a discount for HDPE and LDPE film as the supply for these grades is tighter, and March prices are unchanged from the initially announced levels,” said a trader who reported the lower done-deal levels in Vietnam.