Players: China's hotness is loosing temperature

The PP and PE market in China since players resumed operation on last Saturday after the long National Day holidays, has been firming up on the back of healthy demand is strong energy values. In fact, CommoPlast data showed that domestic homo-PP, LLDPE and HDPE has increased in the range of CNY250-450/ton ($37-67/ton) compared to the pre-holiday levels. Meanwhile, LDPE film surged as much as CNY600-750/ton ($90-112/ton) with the support from limited availability.

However, after four consecutive days of aggressive purchasing, it appears that buyers have already stock up sufficiently and withdraw to the side-line to monitor further development. A PP yarn converter informed, “We have comfortable stock for the next 20 days from purchases during the weekend. Prices have increased too quickly and we can’t afford such high levels. We prefer to hold await and see stance in the next few days.”

A trader added, “We maintain our PP and PE offers unchanged from yesterday, however the number of deal concluded dropped visibly. Our customers claimed to have sufficient inventories, hence temporary withdraw from the market.”

For this, couple of major local trading houses in the country decided to step back on their prices by CNY200/ton ($30/ton) compared to yesterday, however, this is yet to be a major trend since most other traders are holding firm on their prices. Players expected no significant reduction in the near term considering such low inventories levels in major local producer’s warehouses.