Chinese players: LLDPE film demand pick up in local market

Since China market resume working after a week-long Lunar New Year holidays, the general sentiment in the country remains very much of calm in the absence of converters. However, traders started seeing better buying interest for LLDPE film from the agriculture sector toward the end of the week, yet near term outlook remain mixed.

In fact, it is reported that most small to medium size mulch film manufacturers in Northern area are ramping up their production rate and might reach 80 – 90 per cent in the coming week compared to only 60 per cent before the holidays. A coal based PE producer said, “We are receiving better number of purchase inquiries and expect this condition to advance further in the coming week. The mulch film sector is at the peak now while converters are not having high inventories on hand, therefore buyers might not be able to postpone their purchases for too long.”

Meanwhile, several other traders are not that confident about converters’ purchasing power this time, pointing to slower end product businesses and thin profit margins. A market source added, “This explained to why many converters did not stock up high inventory before the holidays. Some of our customers are still holding wait and see stance, therefore we are seeking opportunity to divert some of on hand cargoes to other markets.”

Buyers might come back to make replenishment in the coming week as their inventories run low, however, the sustainability of the trend remain questionable.