Chinese players: Import HDPE might be nearing the bottom
Chinese players: Import HDPE might be nearing the bottom
HD Film HD Yarn
Chinese buyers become more active in making replenishment for PE cargoes over the past several days, especially for HDPE on the believed that market might be nearing the bottom soon. This comes despite the continued weakening upstream ethylene costs in Asia region.
In fact, a major Taiwanese producer reportedly sold more than 6000 tons of HDPE film and yarn to China late last week at the price range $1060-1070/ton CFR China, from which trader decided to up-adjust the price list for the same cargoes to $1110/ton at the beginning of this week
“Sales pressure has lowered significantly. We are waiting to see how the market responds to the positive outcome of the latest trade talk between China and the USA before opening new price list,” an international trader commented.
On 1 December 2018, officials from the US and Chinese government met on the side of the G-20 meeting in Argentina to discuss ways to resolve the differences in the on-going trade dispute. Both countries agreed to a truce for 90 days, starting from the meeting date.
Other suppliers, including a major Thailand maker, also see a better transaction for HDPE. The producer reportedly sold more than 3000 tons of these cargoes to China today at the price $1120-1140/ton, CFR China, LC AS term. “We think the market is about to touch the bottom,” a source close to the producer said.
It is understandable that Chinese buyers started taking position for HDPE cargoes given the bullish sentiment from the trade talk and also prices have reached the multi-months low levels.
From another perspective, the price gap between HDPE and LLDPE film is narrowing down sharply. From a premium that HDPE film carried over LLDPE film of nearly $200/ton in September, it comes down to about $65/ton on an average this week.
“That is why we think room for HDPE film to reduce further is rather narrow. The current prices are acceptable and we also need to stock up some inventories for production in the first quarter next year,” a converter added.