China market: While HDPE film cool off, HDPE blow molding started upswing
China market: While HDPE film cool off, HDPE blow molding started upswing
This week, softened demand continues to anchor the momentum in the import HDPE film market in China. Compared to earlier November, when market hit multi year high levels, the average HDPE film prices in China has come down nearly $40/ton based on CommoPlast Price Index.
In contrast, HDPE blow molding market is catching up with the fellow grade with sharp increases recorded in the recent two weeks time. Players are attributing such development to the fact that supply for this grade is tightening up and the firming trend is likely to persist in the coming weeks.
Chinese sources are pointing to the switch of production at local producers’ to higher value product such as HDPE pipe, causing a drop in HDPE blow molding production by as much as 60%. Together with the drop in import quantity from Iran, market is not having as comfortable supply as before. As a result, the premium between HDPE film and HDPE blow molding is narrowing down real quick, slashing more than 55% in value from the second week of November to only $55/ton this week. If the situation persists, the gap might become even thinner.
However, Chinese players are not expecting HDPE blow molding market to skyrocket like the case of film, firstly due to the smaller consumption and secondly, many can and bottle applications can be replaced with alternatives materials.
“We used to have the 4 litre mineral water can made of HDPE blow molding. We recently changed to PET application for cheaper costs and easier to source cargoes. Many of our regular HDPE suppliers are not having available quantity at the moment,” a bottled beverage maker said.
New offers in the import market is rather limited with a Saudi producer reportedly sold HDPE blow molding at $1240/ton CFR China, LC 90 days without much hassle.
On a related issues, HDPE yarn market is also warming up in China at similar supply condition reported. Indian HDPE yarn sold out very quickly at $1220-1230/ton CFR China term at the time this report is published.