This week, inside China, sellers raised prices of HDPE, LLDPE and LDPE by significant margins on the heels of last week’s price increases as per ChemOrbis. Producers were in agreement that the reason behind this week’s increases was the limited supplies in the country and their own comfortable inventories. Several plants are shut or scheduled to shut inside China, coupled with other plant shutdowns in Northeast Asia and Southeast Asia. While prices for all PE products were raised, the largest jump was in LDPE prices. The overall price range for LDPE saw increases of CNY300-500/ton (US$47-78/ton). HDPE market saw the next largest increase in the overall price range which was up CNY100-400/ton (US$16-62/ton). The LLDPE market saw the smallest change in the price range at up CNY50-200/ton (US$8-31/ton) because of declines in the LLDPE futures market.With the increase this week in local LDPE prices, the gap with import prices widened out to its largest figure of the year. On average, local LDPE prices are US$188/ton above current import prices to China. With this scenario players may have expected import prices to have room to rise. These expectations would be supported by two LDPE plant shutdowns in Southeast Asia at Singapore’s TPC and Thailand’s PTT plus a scheduled maintenance at Yanshan Petrochemical’s LDPE plant in mid-August. However, as producers in China were raising prices this week, crude oil prices were falling day over day. Chinese producers admitted that demand slowed considerably following the latest round of price hikes. Players feel that local prices could reverse direction in the days ahead if crude oil continues to decline. Imports are already expected to stabilize at the currently higher levels because resistance has been building since last week. This resistance is partly responsible for the small gain in import LDPE prices this week.
05-Aug-11 
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