Premium on import LLDPE film over domestic prices in China

17-Dec-10
Import LLDPE film prices are carrying a premium over domestic prices in China, suggesting some downward pressure faced by this market as demand from Chinese buyers has begun to slow down due to ongoing government measures to restrain inflation as well as the upcoming year end bookkeeping period, as per Chemorbis. One Middle Eastern producer has already announced January offers for HDPE film and LLDPE film with decreases from December levels while import prices have also been moving lower in Southeast Asia over the past week. After trading mostly at par for most of November, import LLDPE film prices have exhibited a steadily rising premium over the past four weeks. According to data from ChemOrbis Price Wizard, import LLDPE prices including customs duty (where applicable) are currently carrying a premium of US$50/ton over domestic LLDPE film prices on an ex-warehouse, cash not including VAT basis, with the size of the import premium holding steady this week after increasing in each of the preceding three weeks. With import prices currently carrying a premium when compared with domestic materials, some import sellers have already begun to reduce their prices in an effort to encourage greater buying interest. A global producer, who had initially announced an US$80/ton increase on their December LLDPE film offers, reported that they managed to conclude some deals this week after scaling back their offers by a total of US$50/ton over the past three weeks. Meanwhile, a Middle Eastern producer announced their initial January offers to the Chinese market with decreases of US$30/ton for LLDPE film and US$50/ton for HDPE film when compared with their December offer levels. Players in Southeast Asia have also been receiving lower LLDPE film offers this week. Two converters in Malaysia reported receiving LLDPE film from Middle Eastern producers with decreases of US$40-75/ton when compared with the producers’ most recent offer levels. Meanwhile, a major Southeast Asian producer announced their January offers with decreases of US$40/ton for both HDPE film and LLDPE film this week.
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