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Import PE offers for August surface higher in China, SE Asia

  • 26/07/2017 (04:09)
August PE offers from both regional and overseas producers have started to be revealed with increases to China and Southeast Asia this week. The signals of this recent recovery for August shipments were already in place in last week’s China and Southeast Asia weekly analysis.

In order to track the most up-to-date developments in China’s and Southeast Asia’s PE markets, please see our China Weekly PE Analysis and SEA-India Weekly PE Analysis (For members only).

The import PE sentiment in China cautiously turned upwards during the past week following a 5-month-softening trend. Overseas producers’ limited allocations to the country and higher local prices as well as firmer LLDPE futures, which posted a weekly increase of $56/ton as of July 25, played a role in the modest upturn.

Early this week, traders in China reported that a Middle Eastern producer raised its LDPE and LLDPE film offers by $15/ton from last week. “LDPE supply from the producer is limited,” a trader noted.

A Ningbo-based trader commented, “Import PE prices have turned firmer in China recently due to stronger futures. Local Chinese suppliers are also increasing their offers. However, demand is not catching up this uptrend as buyers are still limiting their purchases to their needs.”

The recent uptrend in China also resulted in slight PE increases in Southeast Asia, where the market slightly recovered from multi-month lows over the past week. Tight supplies from Thailand were cited as another supportive factor in Southeast Asia that contributes the recent gains. Although several players claim that the tightness had no immediate impact on local offers last week, initial import PE offers for August from Asian and Middle Eastern producers were revealed stable to slightly higher.

In Indonesia, a Jakarta-based converter reported that they received August PE offers for a South Korean origin with $10/ton increases from July. “Sellers are standing firm on their new offer levels while we are planning to purchase some cargoes for August.” the buyer noted.

In Malaysia, a converter also reported receiving August PE offers from a Saudi Arabian supplier with rollovers from July and opined, “We are planning to secure some cargoes from the supplier as their levels are attractive when compared to prevailing price levels in the market.”

Another converter commented, “Sellers are not willing to give any discounts for August offers. We think PE prices may stabilize soon.”

This firming in the import market is also expected to find reflection on the region’s local markets soon, as was anticipated in ChemOrbis Headline Story Will limited supplies from Thailand gain prominence in SEA? . Affirming this expectation, a trader in Thailand reported the hike intentions of local sellers on the back of low supplies and the firmer trend in China, although buyers currently continue to show resistance. A buyer in Indonesia also said, “Traders operating in the local market have already started to stand firm on their offers recently.”

Meanwhile, firmer ethylene prices in Asia may also give an upper hand to sellers. Spot ethylene prices are currently standing $55/ton higher than early July, hitting a two-month-high, according to ChemOrbis Price Wizard.
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