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Sine last week, couple of traders active in selling Iranian PE cargoes to China reportedly implement aggressive stance on prices with aim to speed up sales process ahead of the Ramadan season. Several deals for the cargoes stood at $990-1000/ton for LLDPE film, $1090-1115/ton for LDPE film and $1000/ton for HDPE blow molding and injection, all based on CFR China TT in advance term.

A trader sold the cargoes said, “We offered cargoes at bonded warehouse at similar levels, yet unable to attract desirable number of deals. We have not been able to sell well in China recently due to tightened banking regulation that required 100 per cent TT in advance. We plan to divert some cargoes to other market.” In fact, many Chinese buyers feel uncomfortable with the payment term citing high risk and tight cash flow.

Today, Iranian LLDPE and HDPE film emerge in Vietnam at the level $1100/ton and 1120/ton respectively, CFR, LC AS term. A trader offering the cargoes said, “Most buyers are placing bid below the $1100/ton threshold and we are discussing with principal suppliers before setting final prices.” The source also added that they are having an allocation of approximate 1500 tons of Iranian HDPE film this time, which was originally set for China.

Players are monitoring final conclusion prices for these cargoes in Vietnam with many expected at least $20-30/ton discount from initial offers. This could possibly add more pressure on the PE market besides plunging upstream ethylene costs.