Import HDPE film to China traded at premium, LLDPE slipped to ten-weeks low

After hitting the peak during early September this year, import PE to China has been constantly following the softening trend, except for HDPE film, which climbed to all time high this year, thanks to the extreme tight supply condition.

According to CommoPlast Price Index, the average import HDPE film prices to China this week stand at approximate $113/ton higher than LLDPE film and $40/ton above LDPE film. As reported earlier, Chinese players informed of an approximate 100,000 tons of Iranian HDPE cargoes (mostly 7000F grade) facing cancelation due to prolong delay in shipment and disagreement on new price formula. Buyers would therefore, rush to seek for alternative source of material to assure smooth production amid the traditional high demand season.

A buyer cancelled 20,000 tons of the mentioned cargoes said, “There are no compensation available as the delay was caused by persistent unsolved production issues. We are sourcing local cargoes at the moment to fill in the supply gap. Demand for our end product is healthy.”

Most import offers for HDPE film to China this week surged $40/ton on an average and a number of deals for deep-seas cargoes are closed at $1270-1300/ton CFR China, LC 0-90 days term. “With the absence of Iranian and USA cargoes, we fear that the current shortage of HDPE supply might persist through December. Our concern is on LLDPE and LDPE film with strict environmental compliance in the Northern area, agricultural film makers are unable to maintain regular production rate,” a trader commented.

The Chinese government is accelerating effort to reduce air pollution in the country this winter by banning all factories in Northern area to operate at full rate, limiting construction works at the capital city of Beijing, restricting diesel trucks in 28 major cities from this November to March next year. This might affect the manufacturing activities in the country; however, Northern China is regarded as the basket for agricultural and stretch film sector, which might cast more impact on the LLDPE and LDPE film sector.

This explains to the increased declining pace in LLDPE film prices. A trader purchased Indian LLDPE film at $1100/ton CFR China said; “We started making replenishment though bearing in mind that market might slip to below this level in the near term. At the moment, we are still able to attract sales in domestic ground given the fact that prompt cargoes are attracting high attention.”