Local PP, PE prices post additional declines in China
May LLDPE futures on the Dalian Commodity Exchange were down by CNY130/ton ($21/ton) to close at CNY8030/ton ($1119/ton without VAT) on January 12 while May PP futures closed CNY1/ton (16 cents/ton) lower at CNY7203/ton ($1004/ton without VAT). When compared to the previous week, LLDPE futures retreated by CNY300/ton ($48/ton) while PP futures were down CNY394/ton ($64/ton).
Meanwhile, crude oil prices on the NYMEX decreased 43 cents/lb to settle at $48.36/barrel on January 9 while the Brent contract lost 85 cents/lb on the same day to close at $50.11/barrel, the lowest settlement since April 2009. During day trading on Monday, oil prices witnessed further declines, sending Brent crude below $49/barrel threshold and NYMEX crude to around $47/barrel as of the time of press.
A Shanghai-based trader stated, “Local prices are decreasing almost daily and we expect the market to hover around the CNY8000/ton ($1116/ton without VAT) level soon. Almost nobody is expecting prices to rebound anytime soon as futures prices keep moving lower. We are feeling bearish for the first half of 2015.” The trader added that local LDPE film prices plunged CNY400/ton ($65/ton) today.
A second trader based in Ningbo reported that local PP prices have mostly broken below the CNY8500/ton ($1185/ton without VAT) threshold as demand is failing to pick up amidst players’ concerns about the plunging energy markets. “We expect to see additional decreases in the days ahead,” he said.
A third trader in Shanghai added that local homo-PP prices have dropped below the CNY9000/ton ($1255/ton without VAT) level and that they are expecting prices to see further reductions over the near term.
Local PP prices are currently reported in the range of CNY8100-8800/ton ($1130-1197/ton without VAT) for homo-PP raffia, CNY8800-9000/ton ($1227-1255/ton without VAT) for injection and CNY9500-9600/ton ($1325-1339/ton without VAT) for PP block copolymer, all on an ex-warehouse China, cash including VAT basis. Local PE prices, meanwhile, were reported by a distributor at CNY9500/ton ($1325/ton without VAT) for LDPE film, at CNY9200/ton ($1283/ton without VAT) for LLDPE film, at CNY9700/ton ($1353/ton without VAT) for HDPE film and at CNY8500-8700/ton ($1185-1213/ton without VAT) for HDPE injection with the same terms.
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