Is more volatility ahead in China’s PP, PE markets?
Following the end of the National Day holiday, which took place in the first week of October this year, both PP and PE prices were stable to softer, with HDPE standing firm as an exception due to its tight supplies. Since then, the sentiment has changed almost on a weekly basis in the midst of volatile futures markets.
Several players concurred, “Buyers in China are quite sensitive to futures prices. Therefore, PP and PE prices are much affected by the movements of futures.”
Last week, PP and PE prices in China failed to maintain the previous week’s stable to firm trend due to weaker futures, mostly cancelling their earlier gains. “The firming trend proved unsustainable since demand immediately faded away in the face of renewed downward movements in futures,” some traders noted.
According to ChemOrbis Price Index, the overall ranges for both import and local PE prices witnessed weekly decreases of around $10-40/ton. “China’s PE market also faced downward pressure from the rising availability of competitively-priced Indian cargoes this week,” a few sellers also noted.
As for PP, the local market was down by $25/ton while imports were mostly stable.
Meanwhile, January LLDPE and PP futures on the Dalian Commodity Exchange were softening this past week before heading north once again in the last two days, by posting cumulative increases of $38/ton and $42/ton, respectively.
A local trader commented, “The market sentiment was better at the end of last week as futures gained some ground. We heard that the overall PE stocks of CNPC and Sinopec closed the week below 700,000 tons.”
Now, polyolefin players are wondering whether prices will follow futures and shift direction again this week particularly after US oil touched two-year high at the end of last week.
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