Domestic PP, PE prices move lower in China as demand softens

Local PP and PE prices moved lower in China as lackluster demand within the country pushed sellers to reduce prices, as per Chemorbis. Chinese traders are also reported to be actively searching for possible re-export outlets for their excess materials, as stock levels within the country are said to be at high levels, putting further pressure on sellers to reduce prices in hopes of speeding up their sales. Many sellers have directed their re-export offers to Southeast Asia, where demand for both PP and PE has been healthier than China. Many of these re-export offers have been directed to Vietnam, although distributors in the Vietnamese market complain that buying interest within the country is not all that strong at the present while adding that the large number of re-export offers being received from China has further dampened buying interest. Availability in Vietnam is also said to be sufficient now since a large number of previously purchased import cargoes recently arrived at the country’s ports. A few Chinese traders report that they are also considering offering locally-held import PP cargoes to markets as far away as Turkey, although they are trying to sell to nearby markets first as they believe that they will be able to achieve better margins in nearby markets. Declining local PP and PE prices have weighed down on import prices in China. Import offers for homo-PP, HDPE film and LLDPE film on a CFR China basis have fallen well below the prevailing offers on a CIF SEA basis. Although producers continue to maintain higher sell ideas for both PP and PE to the Chinese market, they have been unable to achieve prices close to their target levels so far as traders still have substantial backlogs of previously purchased cheaper materials. Even with import prices to China trailing import prices to Southeast Asia, import offers for HDPE film, LLDPE film and homo-PP still carry a considerable premium over the prevailing local price levels. This week, offers for locally-held LLDPE film cargoes in China fell CNY200/ton (US$30/ton) while locally-held HDPE and LDPE film cargoes witnessed declines of CNY100-200/ton (US$15-30/ton). Local PE prices had gained some ground last week owing to higher upstream costs, but this momentum was lost this week as the crude oil and naphtha prices retreated from their early March highs. Despite of lower crude oil and naphtha prices, most Chinese producers are still operating well below their theoretical production costs based on spot ethylene prices, which have registered only relatively modest declines of around US$10/ton over the past week. In China’s PP market, offers for locally-held homo-PP cargoes are down CNY150/ton (US$23/ton) on the low end week over week while domestic PP block copolymer prices have fallen CNY200/ton ($30/ton) on the low end over the past week. These declines in PP prices come in spite of the fact that spot propylene prices on an FOB Korea basis have gained around US$50/ton over the past week. Distributors added that several domestic producers have altered their pricing policies such that they are now willing to give retroactive discounts on their prices in the event of further price reductions.
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha