China: Pre-holiday replenishment is here, but not all suppliers are benefiting

China market will be off from October 1 to 7 for the National Day holiday and suppliers have been waiting for buyers to replenish materials before the weeklong break. Just after the super typhoon- Mangkhut swept through part of the country, causing flood at some areas and soak materials, the much-awaited pre-holiday replenishment campaign kick-start.

It is observed that purchasing activities for Asian HDPE film and homo-PP are particularly strong, though prices are still at the lower level compared to last week. 

In fact, Taiwanese producer reportedly sold out more than 1000 tons of HDPE film cargoes at $25-35/ton reduction from last week at $1290-1300/ton CFR China, LC 0-90 days term. “Our principal supplier might be facing pressure from a widespread slow down in demand across the region. At the moment, we are offering to buyers at $1310/ton CFR China, LC AS for the same cargoes,” a trader purchased the material said. 

Meanwhile, Thailand HDPE film sees $15/ton reduction in list price, to $1340/ton CFR China, LC AS term. Apparently, a trader managed to secure an additional $10/ton discount to off-take 1000 tons of this material, citing the lack of availability in the local ground. Smaller deals for this cargo are seen at $1335/ton with the same term.

Demand for competitive Vietnamese homo-PP from the new plant is healthy, sources said with one of the major distributors reported having sold more than 2000 tons this week in the price range $1240-1260/ton CFR China, LC AS term. “This is very much aligning with our expectation. More customers are still having inquiries, especially for homo-PP injection grade,” a source close to the distributor informed.

Market is active over the past two trading days, however, not every supplier benefits from the development. It appears that Chinese buyers are more interested in Asian cargoes than deep-sea parcels. “We have to divert some Saudi Arabia homo-PP cargoes to Vietnam at lower price levels to reduce the pressure ahead of the long holiday in China,” said, an international trader offers Saudi homo-PP yarn to China at $1230/ton CFR and managed to sell off some quantity to Vietnam at $1240/ton CIF.

It is still unclear on the market direction in the post-holiday term, especially amid the escalated trade tension between China and the USA. Chinese buyers expected overseas sellers to maintain the competitive price levels in the coming days to deplete as much quantity as one could before the holiday sentiment struck the market.