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The USA and China have been tangling in a trade tension that concerns businesses not only in these two countries but globally. Market participants in the petrochemical industry become more alarm as Chinese government announced a plan to implement up to 25% duties for import LLDPE, LDPE, propane, PVC and ACN from the USA. However, the effect appears to be subsiding in recent weeks as Chinese buyers actively making purchases for USA PE materials.

Most of the cargoes available in these two weeks are HDPE, which were not listed in the USA products that potentially face heavy import duties in China. Market sources are reporting an approximate 20,000 tons HDPE parcels have been sold to China since last week, concentrating film, blow moulding and injection grades.

Last Friday, an international trader sold HDPE film in the range $1320-1350/ton, blow moulding at $1315-1320/ton and injection at $1200-1220/ton, all based on CFR China, LC 60 days term for June and July shipment. The source added, “We sold more about 10,000 tons of the USA HDPE cargoes, mostly to more buyers in small quantity. Customers have no choice as other origins are either priced at higher levels or lacking volume. The Chinese and USA governments started to discuss solutions for the current trade tension and we hope for a positive outcome.”

This week, another 20,000 tons of USA HDPE cargoes become available for June and July shipment with half of the quantity is allocated to China. Offers emerged at $1370-1390/ton for film grade; however, deals are mostly at $1320-1330/ton with the same term.

“We think USA suppliers might focus on producing HDPE grade once new plants start up given the confident demand from Chinese buyers. If more cargoes emerge in the coming weeks, import arrival to China might surge by end of quarter 3 provided shipments are smooth,” a Chinese trader said.