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Two weeks after Chinese buyers returned from the Dragon Boat Festival, demand in the country remains sluggish despite the Chinese Yuan surged to six months high against the USD. In addition to plunging upstream ethylene costs and pressure from competitive Iranian materials, several other Middle Eastern suppliers have stepped back on their PE offers to China by $20-30/ton from last week.

Most regular HDPE and LLDPE film offers from Middle East to China are now below the $1100/ton threshold, which is perceived to be acceptable by many traders. A buyer received Saudi Arabia’s LLDPE film at $1080/ton CFR China, LC AS term said, “We plan to purchase just a small quantity since demand for this grade is better than others. Most other buyers are also seeking for cargoes below the $1100/ton mark, hence we think that sellers might attempt to limit the range of further reduction.” Only Saudi Arabia cargoes at bonded warehouses are priced in the range $1115-1125/ton FCA China, TT term.

Another buyer received offers for Qatar material at $1070/ton for HDPE film and $1080/ton for LLDPE film, CFR China, LC AS term said, “We are a bit concern over the recent Middle East conflict which might affect shipment for these cargoes. However, prices are rather reasonable. We are still considering whether to take these cargoes as Iranian materials are piling up at the main ports waiting for payment to be cleared. This is likely to pressure the market in the near term.”

Several sources reported that there was an estimated 50,000 tons of Iranian PE sold to China during ChinaPlast week and once the payment are settled, market might find itself in comfortable supply condition.

Import Middle Eastern PE to China currently stand at $1070-1090/ton for HDPE film and $1080-1100/ton for LLDPE film, CFR China, LC AS term.