Overseas producers cuts PE offers to China, buying interest remains limited

Purchasing activities in China have been weaker than expected since players resume working after the long Lunar New Year holidays. Heavy inventories pressure urged suppliers in the country to implement softer stance on local offers throughout the past week, and the effect started to show in import ground.

In spite of the lack of supply stemming from on-going maintenance shutdowns, both major PE producers in Thailand and Qatar have introduced $10-20/ton cuts on the latest offers to China.

Latest price list and week on week changes from both makers are shown in the following table.

The adjustments do not seem to have enticed any interest from buyers, who are now mostly on the wait and see position, claiming to have better negotiation power in the local market.

“We fear that the downtrend just only started though upstream ethylene costs are regaining strength. Destocking activities are rather slow, firstly due to many converters are still struggling to restore regular run rate while logistics remain a challenge,” a trader commented.

Sources, however, are hoping to see a more stable market condition in April as converters might have settled manpower issues and come back for fresh buys. “In the immediate term, we might concentrate on re-exporting some cargoes to other markets, where margins are better,” another source added.