Import PE cargoes concluded above $1200/ton mark in China

Import PE market in China has been following the firming trend since early July thanks to limited supply from several major international producers and strong upstream costs. This week, market condition gains additional support after a number of petchem plants in the USA was forced to shutdown following a catastrophic storm. Supply is expected to face further cut back as a result.

Today, a number of deals for import PE cargoes to China are concluded above the $1200/ton threshold, debottleneck for the market to move higher in the near term. A trader sold Iranian HDPE film at $1220/ton CFR China, TT in advance term said, “Supply for HDPE film is very tight at the moment. Many of our customers are still calling for additional quantity even at higher price levels.”

Another trader sold Saudi Arabia and Qatar LLDPE film at $1220-1230/ton CFR China, LC AS term reported similar situation while adding, “The trend might sustain throughout October despite the National day holiday. We are holding back some of the quantity for market might witness stronger hike in the coming week.”

Couple of deals for Indian HDPE yarn is also reported at $1220/ton CFR China, LC AS term. However, one portion of the market is concerning about the extent of further price increment claiming that market might be nearing the peak. “Cash flow might become an issue in the coming month as players have been buying aggressively these two weeks. We are keen to buy nearby cargoes,” a market source said.

Buying interest is strong in China with futures contract for January delivery hit the highest level in a year. Such condition might attract international suppliers to direct their cargoes to China, leading to a possible lack of supply in other markets, especially the nearby Southeast Asia region.