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The aggressive post-holiday replenishment activities in China started to lose momentum this week as buyers have stocked up comfortable inventories while concerning that market might head for a correction in the coming days. While import market holds relatively stable this week; local sellers are offering discounts in a bid to entice demand.

At the time this report is published, local PE market is seeing CNY50-100/ton ($7-14/ton) discount from last week while homo-PP has dropped CNY100-150/ton ($14-22/ton). 

“Sales would still be good if we could meet buyers’ prices. At the moment, supply for homo-PP is still tight and therefore, we do not expect any major swing in term of prices,” a local trader said.

However, in the import market, traders have already lowered offers for Indian homo-PP yarn and injection by $15/ton week on week to $1245/ton CFR China, LC AS term, negotiable. “We have already purchased Saudi cargoes last week at $1250/ton and have no additional inquiries at the moment. Market has entered the correction period and we decided to slow down a little,” a buyer received offers for Indian material informed.

In the PE sector, new price lists from Qatar, Taiwanese, and Saudi Arabia producers remain mostly unchanged from the previous though suppliers are complaining about the weaker sentiment. 

“The PE market is under tremendous pressure from sliding upstream ethylene costs and depreciating Chinese Yuan against the US dollar. Our end product demand is regular, just that we are waiting for an additional price adjustment to emerge,” a flexible packaging converter said. The source reported having purchased Saudi LLDPE film in the previous week at $1120/ton CFR China term.

There has been information that several large-scale converters are rushing export orders for USA customers to be shipped out by the first half of November in order to avoid the additional 15% tariff by January next year. This would support the market to a certain extent, however, looking ahead, sources are not very confident. 

Following table showed import and local PP and PE prices in China as of 16 October 2018