Chinese buyers turn to local materials ahead of holidays

Asian players were hoping that a strong pre-holiday replenishment activity in China would keep the regional PP and PE market on the stable to firmer track. However, the rapidly inflated import market bumped into stiff resistance, resulted in a series of effort from international suppliers to smoothen sales process by stepping back on the hike target.

CommoPlast Price Index shows that the average import HDPE film and homo-PP to China fell $30-40/ton while LLDPE film plunged nearly $70/ton during last week. This took place after ten consecutive weeks of continuous rising offers from international suppliers to China. Players are considering such development as a “price normalizing process”.

Meanwhile, the pre-holiday replenishment activities apparently are still taking place; it just concentrates more on local ground, as buyers are waiting for import sector to gain more stability. “Besides, converters have much of the shipment cargoes covered in the previous weeks, and at the moment, many are searching for ready spot parcels in local ground to meet the immediate need,” a market source informed.

A trader usually sells about 7000 tons of PP to local buyers reportedly see a 30% increased in sales this month, said, “We are running low on inventories too and currently waiting for the right prices to make replenishment.”

Sales for LLDPE film in local market also recorded healthy result over the past days thanks to the end of the environmental inspection in Shandong area that allow agricultural film makers to resume normal operating rate. “We need to stock up some immediate cargoes while waiting for deep-seas materials to arrive. Demand for our end product it healthy and might continue to improve in the near term as the weather is turning cold,” a converter commented.

Despite the recent softening trend, players are not expecting any significant drop in import offers considering the current state of supply and upstream condition. “We do expect buyers to return to import ground right after the holiday. Outlook is positive for October,” an international trader added.