Print

Nine weeks of constantly following the downtrend, import LLDPE film to China might have found the floor this week. Data from CommoPlast suggested that the average value for import LLDPE film to China shredded nearly $100/ton over a period from the third week of May to the second week of July due to persistently sluggish demand condition. 

This week, market bounds back slightly as drastic price cuts in the previous week yielded satisfactory sales results for major overseas suppliers, released them from substantial inventories pressure. 

In fact, Indian LLDPE film that was transacted in the range $1080-1100/ton CFR China, LC AS term previous week has not repeated today. “The producer managed to sell off approximate 20,000 tons of material at these prices and decided to lift offer to $1110/ton now,” a market source reported.

In the meantime, a major Saudi Arabia producer slashed LLDPE film prices by $40/ton from initial price list to conclude deals at $1110/ton CFR China, LC AS term last week, has now introduced $20/ton hike on the latest offers. There are market talks that the producer sold around 10,000 tons at the previous price levels.

Import offers below the $1100/ton threshold have generally disappeared, however, the question lays on the market’s ability to sustain the current firming trend. Players are looking at the ethylene costs that have hit six-months high due to tightened supply as a support, and yet fear of escalated trade war between China and the USA limit the aggressiveness in scouting for cargoes. 

“End product export would be hampered would both countries refuse to resolve the trade issue diplomatically. Therefore, we retain some levels of conservativeness until things become clear,” a buyer said. 

On a bright side, demand for LLDPE film among mulch film converters in Northern China area started to show some improvement and might continue to improve in the coming weeks as the agricultural film season kick-start. “Besides, we are putting heavy hope on the domestic demand during the Single Day Sales in November,” a trader commented. 

While there is a good number of a bullish factor, sources remain very cautious. Prices might, therefore, unable to see any strong rebound in the near term but rather hold stable to slightly firmer.