Indian PE offers competitive edge in China, US yet to follow

Players in China reported that India PE offers have shown up at competitive levels during this week in the import PE market, where prices have been following a firming trend for the past two weeks, with HDPE prices remaining relatively stronger than LDPE and LLDPE given supply tightness. The emergence of Indian offers on this week’s low ends of the overall price ranges was mainly attributed to the recently commissioned PE capacities in India.

As was noted in ChemOrbis Plastics News Indian Reliance starts up new PE plant , India’s Reliance Industries Limited commenced commercial production at its new PE plant with a 550,000 ton/year HDPE/LLDPE swing line and a 400,000 ton/year LDPE unit in late September.

“Indian PE is already offering a competitive edge while we think that Americans will start to be more effective in the first half of 2018,” a few traders opined.

In China, Indian offers were reported at $1150-1160/ton for LLDPE film, at $1220-1240/ton for LDPE film and at $1200/ton for HDPE film, all on CIF, cash this week. Middle East offers, as a comparison, stood at $1180-1250/ton for LLDPE film, at $1240-1310/ton for LDPE film and at $1240-1300/ton for HDPE film, with the same terms.

Meanwhile, players also reported that PE offers from the US, where several producers have also started up new capacities this year, are already traded in the market, albeit in limited quantities.

As was noted in ChemOrbis Plastics News Dow starts up new PE ELITE and ethylene units in Texas and ExxonMobil starts up new PE unit in Texas, DowDuPont Materials Science started up its new integrated ethylene plant with 1.5 million tons/year capacity and its upgraded PE unit with 400,000 tons/year in Freeport, Texas in September while ExxonMobil also started up the first of its two new PE lines located in Mont Belvieu, Texas with 650,000/ton of PE capacity each.

Although the recent levels for the US cargoes are yet to be as competitive as Indian cargoes now, they are expected to enlarge their presence in the Chinese market in the following months in line with destocking activities by year end.

A converter receiving offers for US LLDPE film and HDPE blow moulding at $1210/ton CIF, commented, “US PE has already shown up in China, but in limited availability. Nowadays, the amount of US cargoes is gradually increasing while prices are not competitive enough yet. However, we were informed that by March 2018, supplies to China from the US will be more comfortable.”

A trader based in Ningbo noted, “We noticed that a trader started selling limited volumes of US PE to China and therefore, we may see more competitive prices through the year-end.”

A trader in Shanghai said, “New capacities in India, the US and South Korea are coming on stream by the end of this year. Plus, the US is also recovering its supplies after Hurricane Harvey. Considering these factors, we think the market will change direction and soften in November or afterwards.”