Import LLDPE, LDPE film to China drift lower; sellers await pre-holiday replenishment

Import LLDPE film and LDPE film to China drift lower this week as demand for import cargoes weakened under the pressure of the currency exchange and fear of escalated trade war between China and the USA. 

The LDPE film market witnesses a sharp drop following six consecutive weeks of constantly firming up. CommoPlast data suggests $38/ton dropped in the average import LDPE film prices to China compared to the peak during the final week of August. Meanwhile, the upward stretch in LLDPE film market was not as long LDPE film. It only lasts three weeks and started to move lower by the third weeks of August, losing $41/ton on an average. 

The absence of demand encourages overseas sellers to offer discount this week, and yet the sales results are not up to expectation. Qatari PE sees a reduction of $10-20/ton on LLDPE film to $1100/ton and $30/ton on LDPE film to $1120/ton, all based on CFR China, LC AS term. 

“We plan to place bids below $1100/ton threshold for LLDPE film. Export orders are weak and in fact, we have not received any new orders from USA customers due to the intensified trade war. Our production is at 50 per cent normal rate,” a PE packaging converter said.

Comfortable supply for LDPE film might cap the market’s capability to generate any strong rebound in the near term unless demand strongly picks up, sources said. In the latest visit to Shenhua Baofeng’s main warehouses for coal-based materials, it is found that up to 60 per cent of the inventories are PE, of which a majority is LDPE cargoes.  

While the number of factors that drag the market sentiment is ample, sellers are patiently waiting for the pre-holiday replenishment activities to take place before the weeklong National Day holiday in the first week of October. 

“Many customers are focusing on the local market for the Single Day sales. In the meantime, we started noticing a reduction in local LLDPE film supply, this could stimulate demand for import material again,” a local trader commented.