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Import PE market in China continue to face pressure as Iranian suppliers decided to offer another $20-30/ton discount on both HDPE and LLDPE film cargoes to the country from last week in an effort to deplete inventories. Several deals for these cargoes are reported; though many are raising expectation that prices might inch lower in the near term.

A trader purchased some LLDPE film quantity at $970/ton CFR China, TT in advance term said, “For some reasons, Iranian suppliers are willing to give much lower prices for LLDPE film. This would encourage other suppliers to offer discount as well.” The trader is active in leveraging arbitrage opportunity between spot and futures markets.

There are market talks that Iranian PE cargoes are piling up at China main ports at the moment with total quantity is about 30% higher than same period last year. “Due to the payment issues, the cargoes off-take rate is rather slow in China despite competitive prices. We expect suppliers to divert some quantity to nearby Southeast Asian market in the coming days,” another market source added.

On the other hand, Iranian HDPE film fetches better prices at $1060/ton CFR China, TT 30:70 term. However, the number of deals is rather limited. Players are actively comparing with the availability of Southeast Asian HDPE film at about $40/ton higher than this level, but with safer payment term. “Our USA suppliers also started inviting market to bid for their cargoes, this could depress market further in the near term. Many buyers therefore are taking cautious stance.”