Import HDPE prices trading at par with LDPE in China

28-Aug-15

Import LDPE prices in China are currently trading close to par with HDPE film, a situation that had last occurred in February of this year, according to data from ChemOrbis Price Index. Players cited relatively slow demand for LDPE as the main reason for its weakness relative to HDPE. Data shows that import LDPE film prices on a CFR China basis had been trading with an average premium of between US$25-50/ton during the months of June and July, but that the two products have been trading more or less at par throughout the month of August, with LDPE even trading at a small discount to HDPE for the past two weeks. The premium for LDPE had been as high as US$70-80/ton as recently as May. A trader based in China commented, “Import LDPE prices are weakening due to the strong dollar as well as weaker upstream costs. We expect to see further reductions in LDPE prices in the days ahead as LDPE demand is relatively weaker than demand for other PE products.” Another trader offering Middle Eastern LDPE cargoes to China added, “Most of our customers are holding very low inventory levels these days given the uncertain direction of the market. Import demand in general is limited as many buyers prefer to source their needs from the local market given the recent devaluation of the yuan.”