Post-holiday sentiment stable in China

Chinese players have mostly returned to their desks after the mid-Autumn holiday late last week. Import offers to the country remained unchanged from the pre-holiday levels; however there has not been significant improvement in demand on the first trading day of the week.

A trader offers Middle Eastern homo-PP at $970/ton CFR China, LC AS term informed, “We maintained our offers, yet, customers are hoping for reduction given weaker local market recently. We prefer to hold firm on our cargoes as outlook for the remaining of the month are positive.”

Meanwhile, major local makers have announced fresh price lists for both PP and PE to domestic buyers today at CNY50-100/ton ($8-15/ton) lower than last week to entice demand. A trader commented, “We only managed to conclude a small quantity in the first half of the trading day after the discounts. We think demand would improve in the coming days, as buyers need to replenish material before the National day holidays in early October.”

Another converter added, “We have not been keeping high inventories on hand for sometime now due to highly volatile market prices. It is necessary for us to replenish material this week, though we prefer to monitor couple of days more before making decision. We also plan to ramp up production rate soon.”

Import HDPE film to the country is facing serious demand deficiency from which several sellers have elected to cut their offers further compared to earlier this month. A trader reduced Southeast Asian HDPE film price by $10/ton to $1110/ton CFR China, LC AS term commented, “No one is asking for offers and we feel really worried about the current state of demand. Deep-seas cargoes from Brazil are getting bid well below $1100/ton threshold and this condition might worsen a mid weakening Chinese Yuan.”

Market players are expecting to see more trading activities later this week, yet would prices get sufficient support for a healthy increase, that remain a question among sellers.