China makes a firm return following the holiday

11-Oct-10
A day after the Chinese National Day holiday, most sellers in China elected to lift their offer levels for PP, PVC, PE and PS, pointing to the higher energy and futures market prices, as per Chemorbis. In the PP market, prior to the holiday, import and local offer levels were mostly stable. Some of the domestic producers had lowered their prices by around CNY100-150/ton (US$15-22/ton) while the others stopped offering retroactive discounts in order to keep the market sentiment firm before the holiday started. Following the holiday, domestic producers returned to the market with increases of CNY100-300/ton (US$15-45/ton) while a distributor reported lifting their offer levels by CNY300-400/ton (US$45-60/ton). All these sellers point to the bullish market sentiment and the fact that they are not under any sales pressure for their price hikes. They feel optimistic about the market trend in the near term despite the currently sluggish trading activities since most players are yet to return to their desks. In the PVC market, before the Chinese National Day holiday, supply issues, stemming from the ongoing electricity restrictions, pushed the local acetylene based PVC prices up by CNY250-350/ton (US$37-52/ton) while ethylene based PVC had gained CNY50-250/ton (US$7-37/ton). Post-holiday, some Chinese producers elected to issue initial post-holiday increases of CNY50/ton (US$7/ton) on both their acetylene and ethylene based PVC offers while the others kept their offer levels at pre-holiday levels. These producers highlight that they are not under inventory pressure and that they are mulling over lifting their prices in line with the market trend in the upcoming days. In the PE market, just before the holiday, overall buying interest had picked up as sellers accelerated their purchases with the intention of building up some stocks since they anticipated increases following the holiday period. Higher ethylene costs also influenced this firming sentiment. Post-holiday, local sellers returned to the market with higher prices. A domestic producer issued CNY200-500/ton (US$30-75/ton) increases on their LDPE film prices, CNY150-600/ton (US$22-90/ton) hikes on their LLDPE film offers and CNY250/ton (US$37/ton) increases on their HDPE film prices. The producer puts forward the higher energy and futures market prices as well as the limited LLDPE film supplies for their hikes. Meanwhile, a distributor issued a CNY500/ton (US$75/ton) increase on their locally held offers for Chinese, Thai and Middle Eastern origins, citing the same reason. In the PS market, ahead of the National Day holiday, offers had continued recording increases on the back of the higher styrene costs while traders were reportedly building up stocks as they were anticipating higher offer levels following the holiday. To justify these expectations, a local PS producer issued CNY200-300/ton (US$30-45/ton) increases when they resumed their business after the holiday, pointing to the higher production costs and bullish market sentiment. The seller, holding low stock levels, feels confident that the PS prices will continue to increase over the near term. Meanwhile, a distributor issued CNY300-400/ton (US$45-60/ton) increases on their PS offers, on the back of higher replacement costs as well as better demand.
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