Limited demand leads to further PP, PE declines in China; LDPE hits 6-month low
The resurgence of COVID-19 cases in India, Southeast Asia, and Taiwan has also weakened the sentiment further.
According to data from ChemOrbis Price Wizard, the weekly average of LDPE film prices on CIF China basis has declined to its lowest level since around mid-November. The local LDPE market has also reached a 6-month low, data suggested.
Limited demand pervades polyolefin markets
A trader commented, “Buying appetite for import cargoes is scant as now is the off-season for many PE applications. Lower local PP, PE prices in China have also added to the persisting downtrend in import prices, with buyers preferring to meet their urgent needs from the domestic market. Plus, supply is expected to increase further in the upcoming days with new capacities and less turnarounds.”
Dalian futures retreat after China’s commodity crackdown
Putting pressure on polyolefin prices, Dalian futures have been weak recently despite supportive factors including the recent rebound in oil prices and slightly lower polyolefin inventory levels at home.
This was attributed to China’s intervention to commodity prices, aiming to step up against “excessive speculation” that is pushing up the price of raw materials. The government made it clear that they will show “zero tolerance” for monopoly behavior and hoarding.
September PP and LLDPE futures on the Dalian Commodity Exchange have posted weekly losses of CNY225/ton ($35/ton) and CNY368/ton ($57/ton) on the week as of May 25, respectively.
According to market sources, two major Chinese producers’ overall polyolefin stocks were reported to have edged lower by 25,000 tons on the week to 740,000 tons on May 25. This was reflecting limited domestic consumption.
How much import prices have lost since mid-March
The ChemOrbis Product Snapshot table below compares PE, PP prices and price changes in China from mid-March to today.
*Right click the images and open in a new tab to view the full-sized snapshots.
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