Asian PE prices firm up despite weakening ethylene

Spot PE prices posted significant increases in the Chinese market last week and gained ground in Southeast Asia despite significant price reductions in spot ethylene prices for the second consecutive week, as per Chemorbis. Spot ethylene prices have lost US$60/ton over the past week and US$170/ton over the past month on a CFR Northeast Asia basis. Spot offers have fallen below the US$1000/ton mark for the first time since late August due to rising supply levels in both China and the Middle East. Although cracker operators complained that their operating margins have slipped into negative territory owing to stronger spot naphtha prices, most steam cracker operators have not moved to reduce operating rates yet as they continue to enjoy good margins on their propylene production. The reduction in ethylene prices over the past two weeks has not prevented spot PE prices in China from posting rapid increases as traders and distributors build up their stocks in anticipation that the US Federal Reserve's decision to maintain a loose monetary policy will generate further inflation across the world economy. Limited PE supplies in China have also contributed to the run-up in prices, as traders and distributors exacerbate this supply shortage by restricting sales amounts in anticipation of firmer prices in the days ahead. After concluding some deals last week at prices equal to their initial November offer levels, several Middle Eastern producers revised their November offers upwards by US$30-50/ton this week, with the producers adding that they are still seeing good from their regular customers. Inside China, offers for domestic HDPE and LLDPE film cargoes gained CNY200-550/ton (US$30-82/ton) over the past week while domestic offers for LDPE film posted even larger increases of CNY300-800/ton (US$45-120/ton) over the same period. While bullish sentiment on the part of traders and distributors along with reduced availability is expected to keep PE prices firm over the short term, converters have not signaled their acceptance of the recent price increases. Most converters are waiting in the sidelines for now and are not willing to purchase beyond their immediate needs as they are concerned about their ability to pass rising raw material costs onto their end product prices. Buyers' resistance has already helped arrest the rally in spot PE prices in Southeast Asia, where sellers say that they are struggling to push through increases sufficient to match the rising price level in China.
  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
Milacron 450 ton electric injection molding machine

Milacron 450 ton electric injection molding machine