Yuan devaluation sends import LLDPE, HDPE back to 10-year low in China
“The depreciating yuan has hurt demand towards import PE. Buyers are cautious, securing their urgent needs from the local market,” a trader commented.
LLDPE and HDPE hit a fresh decade low
Traders reported that HDPE and LLDPE film prices on CIF China basis were stable to $20/ton lower from last week, with their weekly averages hitting a fresh decade low, data from ChemOrbis Price Index suggest.
HDPE film moved below the $1000/ton CIF threshold last week for the first time since March 2009.
Import LDPE prices also soften
Import offers for LDPE film, meanwhile, also softened on the week to hit their lowest levels since late June 2019. The LDPE market witnessed smaller drops when compared to LLDPE and HDPE in the previous weeks on the back of some supply limitations across Asia.
Other factors adding to buyers’ wait-and-see mood
The devaluation of the yuan is the main factor behind the waning demand for import PE purchases in China. However, players agree that fluctuating crude oil futures have also been playing a role in buyers’ cautiousness as a volatile energy market creates uncertainty for the near-term outlook.
Besides, high polyolefin supplies inside China have also been weighing on the market, keeping purchasing activity limited. Traders reported that two major producers’ overall polyolefin supplies remained high at around 800,000 tons.
Spot ethylene extends gains
Contrary to PE, spot ethylene prices on CFR China basis have been moving higher since their weekly average hit a 10-year low six weeks ago, according to data from ChemOrbis Price Wizard.
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