Import PE prices to China firmed up on tight supply

Chinese players reported on the first trading day of the week receiving fresh offers for import HDPE and LDPE film cargoes at $10-20/ton higher than last week while very limited number of LLDPE film parcels observed. Market sources are looking at several factors that strongly support the firming trend including higher monomer costs, limited supply from Middle Eastern suppliers during Ramadan season, and also the persistent price increment on Dalian Commodity Exchange.

A trader sold Iranian LDPE film at $1185/ton CFR China, LC 90 days said; “We believed that market would remain on the rise in the near term, hence we prefer not to sell too aggressively with hope to achieve better margins. Our on hand inventories is rather low as most of our cargoes got delayed due to Ramadan holidays.” This, however, is regarded as a “high risk” support factor considering the state of supply once Middle Eastern cargoes arrive to the market.

Even import HDPE film has increased from last week with a trader informed, “We lifted Kuwait HDPE film prices by $10-20/ton to $1160-1170/ton CFR China, LC 90 days, but the respond is not as good as desired. Indeed, customers are showing very limited interest in negotiating for deals. In spite of slower purchasing activities, we have no plan to cut our offers given limited availability.”

Contract 1609 for LLDPE on Dalian Commodity Exchange rise steeply on Monday to settle CNY445/ton ($67/ton) higher than last week, which give traders a confidence boost about near term outlook. Most traders therefore are showing intention to hold firm stance on their available cargoes.

Import LDPE film to China is reported at $1185/ton and HDPE film at $1130-1170/ton, CFR China, LC 0-90 days term.