Is China’s local PE market surrendering to holiday lull?
In the country’s local PE market, however, prices started to soften as of last week after recording consecutive increases for around one month. Softening domestic offers were attributed to lower futures and the upcoming holiday, with the overall price ranges posting weekly losses of around $15-40/ton.
May LLDPE futures on the Dalian Commodity Exchange were down by CNY325/ton ($38/ton) on a weekly basis on February 5.
In Asia’s upstream markets, meanwhile, spot ethylene prices have been moving south for the past couple of weeks in spite of high crude oil futures. Players mainly attribute lower ethylene prices to weaker demand as well as reduced PE production in the region.
A few traders opined, “Fading pre-holiday activity is weighing down on the PE sentiment while the recent appreciation of the Chinese yuan against the US dollar has failed to trigger demand.”
According to some players, local demand is already weak as buyers, who don’t expect to see major changes in prices in the post-holiday period, delay their purchases to late February.
On the other hand, China’s import PE market maintains its bullish trend amidst the ongoing availability issues, particularly for HDPE. A major Saudi producer announced its February PE prices to the country last week with notable increases of $120/ton for HDPE film, $80-90/ton for LDPE film and $60-70/ton for LLDPE film when compared to January. Some major producers in the Middle East are also planning to shut their PE plants for maintenance in the February-March period.
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