Local PP, PE prices in China soften further after holiday
According to players, two major producers’ overall PP and PE inventories increased above 1 million tons during the holiday. In addition to rising local supplies, PP and LLDPE futures on the Dalian Commodity Exchange retreated on February 26-27, witnessing cumulative decreases of up to $35/ton and $20/ton, respectively.
The ongoing stagnancy of buying interest as well as the recent losses both in spot ethylene and propylene prices in Asia also weighed down on the sentiment.
A trader commented, “Domestic PP and PE prices are slightly lower this week as demand fails to catch up with increasing local supplies. For this reason, we think that prices will continue to soften until next week when more players return to the market. Buyers are showing resistance to the prevailing price levels.”
A converter noted, “We prefer to wait for PP prices to soften further until we make any fresh purchases. Local PP prices are offering a more competitive edge than imports. We think the state of demand will be clearer by next week as more players will be back to the market.”
A PE trader opined, “Local PE prices have softened relatively more than import prices. Buyers are still not fully active; therefore we think that the softening will remain in place for the next two or three weeks. A rebound may occur afterwards when buyers’ replenishment activities pull local inventories down to a certain level. In the meantime, PE offers from overseas producers are currently scarce while US cargoes are limited, which might prevent a steep decrease on import PE offers.”
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