Import HDPE film to China inches lower, chilled sentiment might persist

Following an extended period of firming up on the back of supply shortage, import HDPE film market in China started to cool down this week amid stiff buyer resistance, especially toward offers at the upper end of the overall price range.

CommoPlast Data showed a reduction of approximate $25/ton on an average compared to the peak during second week of November. Yet, it is important to note that most of the reductions are taking place at the upper end of the overall price range.

Besides the fact that buyers are loosing interest in the making replenishment at high prices, which squeezed profit margins; supply appears to be eased a little. This is a result of attractive margins that draw in a number of re-export cargoes from markets around the world, including from Vietnam, Middle East, Europe and USA.

As reported earlier this week, few thousand tons of Middle Eastern HDPE film are concluded in China at $1270/ton CFR China, based on re-export term from USA and UAE. “We are receiving offers for 400 tons of Iranian HDPE film, re-export from Belgium at $1290/ton CFR China, LC 60 days term. This is a ‘rare’ grade in domestic market at the moment and we plan to purchase,” a local buyer informed.

From another aspect, it appears that more USA cargoes are becoming available in China, which concentrated heavily on HDPE grades. A trader informed of having approximate 3000 tons of prime HDPE film and 2000-3000 tons of HDPE blow molding that are opened for spot buyers. “We are also having LLDPE film and HDPE injection grades. All of these cargoes are for December shipment. More quantity shall be coming by first quarter next year,” the source informed. Players are feeling uneasy with the update on USA cargoes, posting strong concern about market prospect in the post Lunar New Year term.

Purchased cargoes at the moment might take some time to arrive, and at the meantime, players are not expecting any drastic reduction for ready materials are still limited. Having saying that, further upswing is less likely to take place, too, leading market to a more stabilizing state.