Import HDPE film trades at par with LDPE film in China

23-Sep-14

This week in China, import HDPE film has started to trade at par with LDPE film, after holding almost steady in H1-September, remaining indifferent to the steep reductions posted by LDPE and LLDPE, as per ChemOrbis. For LLDPE, last week's import offers were reported below spot ethylene prices as warmer than usual weather conditions resulted in a delay in the agricultural film season, boosting supply levels. At the same time, players reported that HDPE film was not affected by the weak market conditions as much as the other products, as most HDPE buyers are exporters of their end products. This week, the import PE market remains under downward pressure from the weaker domestic market and the National Day holidays in the first week of October as sellers are looking to sell out their stocks, which resulted in greater availability in the market. A Southeast Asian producer reported slightly lower export PE offers to China this week. A producer source reported to have reduced HDPE film output after focusing on the production of other HDPE grades. The source stated that they are not optimistic about the outlook for the short term while adding that they are waiting to see buyers’ response before considering further adjustments. A trader based in Ningbo reported that demand is muted as buyers remain cautious due to their expectations of seeing further softening in the upcoming days. “Import LLDPE prices have declined notably due to pressure from weak futures prices, coal based capacities and poor demand. We have heard that some plants are shifting to HDPE film production rather LLDPE due to the ongoing downward trend for the latter product. We expect the current softening trend to extend into the first half of October,” he commented. According to ChemOrbis, a converter in Shanghai commented, “We expect a major Middle Eastern producer to announce their October prices this week. Considering the gradual softening in the local market, import prices may decline as well. We are planning to negotiate before making some purchases ahead of the holidays.”