HDPE film market gallop lower across the region, buyers await further cuts

Throughout the first six months of the year, import HDPE film to China has repeatedly hit the $1450/ton benchmark as suppliers claimed the support from the global limited supply. However, this mark also acts as the ceiling price as the market tends to face correction once reaching this level.

There is no exception for this round, which sees import HDPE film to China at the upper end of the overall price range briefly touched the $1450/ton threshold during the final week of May, and since then consistently going down, losing up to three digits in value, according to CommoPlast data.

Thailand, Taiwanese and Iranian (7000F) cargoes are the primary origins that form the upper end of the overall price range for import HDPE film to China, and most of these producers have slashed prices significantly over the past several days. 

In fact, deals for Thailand cargoes done during late last week at $1350/ton CFR China, LC AS term, marking a $100/ton reduction from late May. Meanwhile, Taiwanese cargoes are priced at $1355/ton with the same term at the time this report is published, with limited transaction observed. 

Trade war fear continues lingering in the market and put a heavy weight on the sentiment, sources said, as a long list of plastic end products including flexible packaging are being targeted by the USA government for heavy tariffs. “As a result, many converters refrain from keeping high inventories to avoid too much exposure to the unfavourable international trade condition,” a distributor commented. 

Besides, weakening Chinese Yuan against the US dollar also has its role in deterring buying interest for import cargoes in general while sending USD prices lower. “However, we started seeing some demand these few days as the price reductions are attractive enough. Export end product businesses might be hurt would the USA and Chinese government refuse to resolve the recent trade splash diplomatically, from which we are putting heavy hope on local demand for the Single Day in November,” another trader added. The source also commented that market might ride its way back to the previous lows seen during March if the current tension persists in the coming weeks.

Trade war and the currency exchange rate issues are also hurting the sentiment in the nearby Southeast Asian market, where buyers have been resisting high prices for import HDPE film for a long period of time. This week, deals for Thailand HDPE film reach $1330/ton level in Vietnam while Kuwait cargoes hit $1320/ton, all based on CIF, LC AS term. 

“We made small purchases while waiting for additional reduction. The local market is falling too, in spite of the sharp depreciation of the Vietnamese Dong, and therefore, we do expect the import market to breach below the $1300/ton threshold,” a converter commented. 

Another international trader based in Vietnam said, “Supply for HDPE film might gradually improve in the coming weeks as a couple of major international producers switch to make film grade following the fall in the HDPE pipe prices. We are not carrying high stock and yet, not having a bullish expectation for the remaining of July.”