PP, PE sentiment cautiously improves inside China, imports unaffected
LLDPE and PP futures on the Dalian Commodity Exchange posted a cumulative increase of $42/ton last week. LLDPE has continued to witness slight gains so far this week while PP is drawing a volatile picture for the moment. Sellers also attributed the recent recovery in the local polyolefin markets to slightly higher futures.
A trader commented, “Local PP and PE prices forming the low ends of last week’s ranges are disappearing from the market in line with decreasing inventory levels of CNPC and Sinopec. However, demand remains below expectations as buyers continue to replenish their stocks on a need only basis due to ongoing environmental inspections which particularly affect the downstream markets.”
Another trader stated that Chinese converters are still cautious about replenishing despite the disappearance of low end offers. “Buyers continue to limit their purchases as they are now monitoring the developments in the import markets, where PP and PE prices remain stable. We believe that the local market still needs time to digest the existing stocks before showing a strong rebound,” he opined.
As for the import PP and PE markets, traders concur that prices mostly remain on a steady path for the moment. “Import prices remain under downward pressure due to lack of demand. Chinese buyers still prefer local materials to imports despite the recent recovery in the local market,” a seller noted.
A Ningbo-based trader reported that he is still focusing on re-exporting activities as demand towards import materials remains quite weak in China. “We are offering Mexican and Iranian HDPE film at $1190/ton FOB China, cash. For LLDPE film, however, we ceased to give re-export offers as the local LLDPE film market has started to improve recently,” the seller noted.
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