Local PP, PE prices open the week on a soft note in China
May PP futures on the Dalian Commodity Exchange closed CNY295/ton ($48/ton) lower at CNY7597/ton ($1057/ton without VAT) on Monday, January 5 while LLDPE futures on the Dalian Commodity Exchange for May closed the day CNY165/ton ($26/ton) lower at CNY8330/ton ($1159/ton without VAT). Week over week, May PP futures came down CNY167/ton ($27/ton) while LLDPE futures inched up CNY70/ton ($11/ton).
A source from a domestic producer reported that they reduced their PP prices by CNY100-200/ton ($16-32/ton) to CNY9200/ton ($1498/ton without VAT) for raffia, to CNY9350-9400/ton ($1523-1531/ton without VAT) for homo-PP injection, and to CNY9500-9600/ton ($1547-1564/ton without VAT) for PP block copolymer injection, all on an ex-warehouse China, cash including VAT basis. The source stated, “Demand remains disappointing while sentiment is being weighed down by weaker upstream prices. We are still running our plant at full rates, although we are not feeling optimistic regarding the near term demand outlook.”
A trader based in Ningbo stated that local PP prices decreased around CNY50-100/ton ($8-16/ton) at the start of the week as future prices posted reductions on Monday. He reported receiving PP offers at CNY9200/ton ($1498/ton without VAT) for raffia, at CNY9300-9400/ton ($1515-1531/ton without VAT) for homo-PP injection, and at CNY9500-9700/ton ($1547-1580/ton without VAT) for PP block copolymer injection, all on an ex-warehouse China, cash including VAT basis. He commented, “We expect that demand will be even weaker after mid-January as the Chinese New Year is approaching. Prices for prompt cargoes are higher nowadays due to some supply restrictions. For the near term, we expect prices to hover around their current levels. However, we still see some possibility for prices to soften over the medium term.”
A Shanghai-based trader added, “We expect local prices to break below the CNY9000/ton threshold as feedstock costs still have room to move lower based on crude oil prices. Plus, converters are not interested in building high stocks as demand from their customers is not that good.” The trader received PP and PE prices at CNY9200/ton ($1498/ton without VAT) for homo-PP raffia, at CNY9300-9400/ton ($1515-1531/ton without VAT) for homo-PP injection, at CNY9900-10000/ton ($1378-1392/ton without VAT) for LDPE film, at CNY9900/ton ($1392/ton without VAT) for LLDPE film, at CNY10000-10100/ton ($1392-1406/ton without VAT) for HDPE film, and at CNY9000-9100/ton ($1253-1267/ton without VAT) for HDPE injection, all on an ex-warehouse China, cash including VAT basis.
A third trader reported that domestic prices moved lower by CNY200-300/ton ($32-48/ton) for LLDPE film and by CNY100-200/ton ($16-32/ton) for homo-PP . He said, “Prompt supplies are limited while demand is relatively better in the local market. However, buying interest is slower when compared to December. For the first quarter of 2015, we are feeling a bit bearish about the market outlook.” The trader received offers for domestic material at CNY10000/ton ($1392/ton without VAT) for LDPE film, at CNY9600-9700/ton ($1336-1350/ton without VAT) for LLDPE film, at CNY9200/ton ($1498/ton without VAT) for homo-PP raffia and at CNY9300-9400/ton ($1523-1531/ton without VAT) for injection with the same terms.
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