The premium separating spot HDPE film prices on a CFR China basis from spot ethylene prices in Asia has begun to narrow once again after having maintained a healthy premium over the past 8 weeks, as per ChemOrbis. Import HDPE film prices have eroded by US$40/ton on the high end as well as the low end of the range this week, as PE prices have reacted more quickly to the recent drops in energy costs when compared with prices for other polymer products. HDPE film prices have been trading at a premium of around US$225-265/ton over spot ethylene prices since mid-June. The premium for HDPE film over ethylene has been at its healthiest level since late in 2010 as HDPE film had been trading at close to par with the average ethylene market level for the first few months of 2011 before regaining its premium towards the beginning of May.
HDPE film's premium over ethylene dropped US$50/ton this week, falling to around US$200/ton, the lowest level seen since the beginning of June. China's PE market has been moving steadily lower ever since crude oil prices began to lose ground towards the end of last week, whereas spot ethylene prices have been more sluggish in reacting to the global debt crisis and the steep losses in energy markets. Spot ethylene prices on a CFR Northeast Asia basis were unchanged over the past week, although prices have slipped down by around US$20/ton from the start of the week. Traders in the ethylene market are trying to keep prices firm after Nymex crude oil prices moved back above the US$80/bbl threshold in the middle of this week, although most players acknowledged that the ethylene market will most likely witness a correction following the steep downward movements in energy costs over the past week.
12-Aug-11 
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