Weaker demand forces overseas makers to soften stance on PE offers to China

It become clear that import PE to China has hit the peak and at the moment, is facing a self-adjustment period. Players are not expecting any major price correction because the overall supply condition remains pretty tight for now, yet many have slowed down purchasing activities in anticipation of softer market levels.

Overseas suppliers started opening new offers to China this week, mostly with laxer stance in spite of strong ethylene costs and resilient energy complex. In fact, a major Thailand maker keep PE offers unchanged week on week, at $1355/ton for HDPE film and $1255/ton for LLDPE film, all based on CFR China, LC AS term. No offers for LDPE cargoes this time.

The rollover totally against the maker’s initial plan of implementing further hikes. Players are blaming the diminishing buying interest for high cost import cargoes for the softened stance from overseas seller. “Domestic market continues to weaken, especially on HDPE film. Import market might be under pressure. At the moment, our regular customers are not interested in making purchases while placing bids at well below the offered level,” a distributor said.

Meanwhile, Qatari PE witness $20/ton drop, which bring LDPE film to below the $1200/ton threshold, at $1190/ton CFR China, LC AS term. Other cargoes stand at $1210/ton for LDPE heavy duty and $1160/ton for LLDPE film, all based on CFR China, LC 60 days term.

The adjustment does not excite buyers apparently. “We are willing to cut additional $10/ton for serious buyers and yet, only manage to close some small deals,” a trader said. Sentiment is calming down and might persist in the coming day, the source added.