Import HDPE film surged in China on limited supply

After a brief slow down in the previous week as players returned to work from the long holiday, import HDPE film to China continue to firm up in line with tightened supply in both local and import ground. On an average, import HDPE film based on CFR China, LC 0-90 days term increased $25/ton week on week, according to CommoPlast data and might remain firm in the near term.

Prices below the $1250/ton are becoming relatively scarce in the market and most suppliers are not having ready cargoes at the moment. A trader offered 150 tons of USA HDPE film at $1250/ton CFR China, LC 60 days term for December shipment and players find it difficult to accept. A source said, “There is high level of uncertainties due to the long shipment time. Besides, the quantity is very small hence we are not very interested in this cargoes.”

Middle Eastern suppliers are not active in giving new offers and even with offers, allocation is not confirmed. A trader offered Saudi Arabia HDPE film at $1270/ton CFR China and willing to give $10/ton discount on deals, “Customers are pressing for prices below the $1250/ton, however we are not planning to adjust prices beyond the given range. If customers were to confirm the orders, we would have to wait for confirmation from our principal supplier.”

Iranian HDPE film meanwhile, climbs to $1300/ton CFR China term, “And yet, there are no ready cargoes available. The supplier is clearing backlog and might need a little longer time in order to have spot materials. This condition is likely to keep market on the firm trend in the near term,” a trader informed.

Multiple issues have been identified as the contributing factors to the tightening HDPE film supply condition. Besides the lack of recycle material and the serious delay of Iranian cargoes, players are pointing to the switch in domestic production. Many local producers shift to produce HDPE pipe in a wake of strong demand from pipe sector after the government announced support scheme to build intensive gas line to substitute coal power to reduce pollution. Suppliers therefore are very optimistic about the near to medium term outlook