Poor demand from China pushing up LLDPE supply in other markets across the globe

03-Jun-11
Poor demand from buyers in China has spurred a number of global LLDPE sellers to divert their cargoes to other markets in hopes of achieving greater sales, as per ChemOrbis. Meanwhile, a number of traders inside China are offering their existing LLDPE stocks to other global markets to pare down their stock levels. One trader also reported offering Chinese LLDPE film to the Southeast Asian market in hopes of speeding up their sales. According to data from ChemOrbis Price Index, spot LLDPE film prices on a CFR China basis have lost a total of US$90-100/ton since the first week of May. HDPE film and LDPE film have declined at slower paces- losing $40-60/ton and US$60-70/ton respectively, over the same period. Sources attributed the faster rate of decline in LLDPE film prices to weaker demand as well as ample supply levels as producers with HDPE/LLDPE swing plants have been unable to immediately switch to producing HDPE even despite more favourable production economics for HDPE than for LLDPE. Re-export offers from China have been steady in Southeast Asia’s PE market for some time now as Chinese traders have tried to sell off excess stocks. Most of the import LLDPE film offers reported in Southeast Asia this week were for re-export cargoes from China, with several Southeast Asian producers suspending their spot LLDPE film business due to unfavorable market conditions. A large Chinese trader offering Japanese and North American LLDPE film to the Southeast Asian market this week reported that they have lowered their offers for these cargoes by US$80-100/ton on an FOB China basis. A large trader in Vietnam commented that an increasing volume of material from global producers is being redirected towards Southeast Asia due to poor demand inside China. Re-export LLDPE offers from China have also begun to make their way to the Indian market as traders widen their sights in an attempt to whittle down stock levels. The same trader offering Japanese and North American LLDPE film to Southeast Asia is also offering these products to the Indian market, while another Chinese trader reported to be offering some Middle Eastern LLDPE film for re-export to the Indian market. The trader complained of facing difficulty concluding deals with buyers in India as they remain on the sidelines for now in anticipation of additional price reductions over the near term. The lack of demand in China as well as difficulties in selling off excess stocks in nearby markets has also lead to some irregular LLDPE film origins appearing in Egypt. A trader managed to conclude some deals for irregular Indian and Canadian LLDPE film cargoes this week after announcing initial offers for these origins last week at a price towards the low end of the overall import range in the Egyptian market. The trader is also offering some Middle Eastern LLDPE film on a re-export basis from China at prices below the prevailing offer levels for Middle Eastern LLDPE film in Egypt, commenting that they have not been able to conclude any deals for this origin for the past two weeks.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

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