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July PP, PE prices into China, SE Asia signal further bearishness ahead

by Pınar Polat - ppolat@chemorbis.com
  • 30/06/2022 (10:48)
Several regional and overseas suppliers announced their July PP and PE prices to China and Southeast Asia mostly with decreases this week. Bearish demand in China amid the uncertainty over the pandemic has persisted, standing as the main factor pulling prices down across the region.

The off-season for polyolefins, the economic challenges across the globe, and the recent fluctuations in energy values have also kept buyers in a cautious mode.

Mid-East origin PP, PE prices fall further in China

Import polyolefin prices in China have posted additional decreases this week, including Middle-East origins. A major Saudi producer announced July offers to China down by $90/ton for LDPE film, $70/ton for LLDPE film and homo-PP raffia, and $60/ton for HDPE film when compared to last month. “Covid-19 measures were eased in early June but now there is an uncertainty due to the resurgence of new infections. Although the peak season is approaching, demand at home is weak as many buyers are not replenishing materials or just buying on a need basis,” the agent noted.

Homo-PP raffia and injection at /above $1100 CIF mark vanish

Homo-PP raffia and injection prices have moved down by $20/ton from last week at $1050-1080/ton CIF China, cash basis.

A trader reported concluding deals for Russia origin raffia on the low end, and said, “Demand is still slow due to the lack of market confidence amid the resurgence of new cases. We think this is likely to pull prices further down in the near term along with the steady fall in spot propylene prices.”

PE sees relatively smaller losses

As for PE, prices for the Middle East origin were flat to $10/ton lower than last week at $1350-1380/ton for LDPE film, $1090-1110/ton for LLDPE film, and unchanged at $1090-1120/ton for HDPE film with the same terms.

“LLDPE and PE futures prices have moved higher since the beginning of the week, following a long-term downtrend. But we are not sure whether this upturn will be sustained or if it is a sign of a rebound. Supply at home is more balanced between the increased number of plants having turnarounds and new plants coming on stream. Still, the major producers’ inventory levels are still way higher than last year’s same period. The demand side is also disappointing,” a PE trader said.

Spillover impact from China remains in SE Asia

Similar to China, Saudi suppliers’ July PE offers to Vietnam also surfaced with monthly losses within the range of $40-60/ton.Import and local PP, PE offers from some regional producers for July were also on a stable to lower note.

A PE seller reported offering LLDPE film at $1280-1300/ton, LDPE film at $1590-1600/ton, and HDPE film at $1290-1320/ton, all on CIF SEA, cash basis. Compared to last week, LDPE prices are down by $10-20/ton while LLDPE offers are flat. HDPE here makes an exception, as they are higher by $10-20/ton due to relatively better demand.

“The overall demand isn’t doing well in Southeast Asia, but still we prefer not to give so much discount. If buyers don’t accept these prices, then the offers will be directed to other outlets with better netbacks. We have heard that Chinese traders are quite active in selling to Southeast Asia recently, probably due to weak demand in China.”
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