Regardless of exchange rate, overseas sellers lifted import PE offers to China

Import LLDPE and LDPE film to China continue to inch higher for three weeks in a row despite the constant depreciating Chinese Yuan that was expected to cast some detrimental effects on the general sentiment. Purchasing interest in China is improving, sources said, pointing to the preparation for the agricultural film season in Northern China market.    

In three weeks time, the average import LLDPE film and LDPE film to China have gained an approximate $50/ton and $55/ton respectively, data from CommoPlast Price Index suggested. 

“We are surprised. We did not expect the uptrend to sustain given the depreciation of the Chinese Yuan against the US dollar, however, buyers have shown better acceptance this week,” a trader commented.

In fact, Singaporean maker reportedly implemented $20/ton hike on PE cargoes from last week, to $1180/ton for LLDPE C4 film and $1290-1310/ton for metallocene PE, all based on CFR China, LC AS term. Sales are smooth to the Northern part of China, traders said.

In the meantime, a major Saudi Arabia maker insisted to introduce $20-30/ton hike to China this week, sending to latest offers to $1160-1170/ton for LLDPE film and $1190/ton for LDPE film, CFR China, LC AS. “The supplier is not facing any inventories pressure, therefore, refused to give any major discount. Except for agricultural film buyers, others customers are rather cautious,” another trader added.

There is a strong conspiracy that overseas sellers decided to lift prices, shrugging off the effect from the currency exchange issues due to sufficient support from the apparent better demand condition and resilient upstream costs. Besides, the Chinese government slapped 25 per cent tariffs on import PE from the USA, which technically wipe out a major competitor here. 

Such condition is attracting some of the irregular LDPE film cargoes originated from Europe that dealt at $1120-1130/ton CFR China. 

There is clearly a fundamental change in the flow of material throughout the region with more USA cargoes emerged in Southeast Asia and non-USA cargoes are going to China at higher levels. Players are watching out for further development, though one thing clear is that, converters who used to export end product to the USA are now seeking new export destinations.