Mid Eastern producers aim to keep Polyethylene trend firm before Oct holidays

New PE prices from mainstream Middle Eastern producers were announced to China and Turkey this week, as per ChemOrbis. Most suppliers returned with rollovers to some hike requests for October ahead of a week-long National Day Holiday in China and Eid Holiday in Turkey next month. Although claims about limited availability with several producers provides support to firm prices, buyers hope to see some price relief as markets continue to be bearish amid weaker energy prices that seem set to resist higher levels. In China, a Middle Eastern producer rolled over October LDPE and LLDPE film prices from September blaming high ethylene prices and insufficient supplies. "We managed to conclude some deals at our new offers for new shipments. We are free from stock pressure as our total supplies are not sufficient. We don’t expect to see increases after the holidays given falling local prices and overall inactive demand from converters," a producer source stated. Another Middle Eastern supplier issued rollovers to increases on the back of limited supplies triggered by their shutdown. The producer rolled over HDPE film offers from September, and raised LLDPE offers by US$10/ton. A source at the producer mentioned, "Some customers showed stiff resistance to our prices and we have yet to make any sales so far. Our overall supplies are less than last month.” A trader based in Ningbo said they are holding less than normal stocks now and unwilling to source large volumes. “Overseas producers seek rollovers or increases from last month. We will not source large volumes as we have no clear view regarding the post holiday atmosphere given constantly falling local prices and insufficient restocking activities before holidays. Crude oil prices retreated more this week while LLDPE film futures prices remain on an upward trend. Hence, we plan to act cautiously and will hold low stocks for holidays," he said. A trader based in Yuyao stated that they sourced some volumes from their regular overseas suppliers to fulfill agreement volumes. "Our stocks are less than normal for imports and we will not build high stocks given high replacement costs, weak demand and the softening local market. Prices will remain stable before the holidays. We don’t foresee rapid declines in import prices given relatively insufficient supplies and high ethylene costs though," he said. An agricultural film maker said, “We will purchase only our urgent needs and from the local market since we will suspend production during holidays considering insufficient demand for our end products. We are still not sure about the exact restart time of our lines after the holidays.” In Turkey, buyers reported receiving new offers from a major Middle Eastern producer with increases ranging between US$20-30/ton for LLDPE and US$40/ton for HDPE, although a large scaled buyer reported to have received a rollover from the supplier. “We have yet to negotiate on these prices," a packager said, while another noted, “We had to purchase some material in accordance with our contract. The market may witness hike attempts of US$10-20/ton but they have no way to pass as market conditions will slow down further next month.” A third buyer thinks that he may obtain $10/ton discounts from the producer. "Prices will probably soften in October," he predicted. Another buyer heard that the producer’s LLDPE availability is tight. A Middle Eastern producer reported that they announced rollovers for October. “Demand is not very strong these days, but we hope to see some improvement in buying interest ahead of the upcoming holidays,” a producer source noted. A different Middle Eastern producer announced their October prices with rollovers for HDPE and US$10/ton increases for LLDPE from September. “Our allocation remains tight because of some production problems at our plant. Our PE plant will resume operations at the end of October, at the earliest,” a producer source noted. A global producer, in the meantime, reported that they have not finalized their October Middle Eastern PE prices yet. “We will most probably announce a decrease of around $20/ton as we expect to see reduced consumption in the coming month owing to holidays,” a source at the producer noted. A trader received new PE offers from another Middle Eastern producer albeit for small quantities, adding that the producer didn’t step back from their levels. Prices are not likely to move up much and may hold steady amidst the appreciated US dollar and generally discouraging demand, according to the trader. According to ChemOrbis, in China, PE makers are likely to continue to adopt a firm stance on their initial October offers ahead of the holidays, although buying interest will probably remain mediocre in the last week before the holidays. In Turkey, unsupportive demand may bring a stable to soft trend in the days to come if initial levels see downwards adjustments as buyers hope.