Import PP and PE market continues to track stable to softer trend in China

Chinese buyers return from the long weekend Dragon Boat Festival showing softer buying interest compared to the pre-holiday period, taking time to monitor further market movement after the large drops in both ethylene and propylene costs.

Import PP and PE offers continue to track stable to softer trends and though deals have been achieved, the sentiment remains heavy, sources said.

Qatari LLDPE film emerges at $1030/ton CFR China while LDPE film cargoes inch $10/ton lower to $1170/ton with the same term. “The available quantities are very limited. We have a feeling that suppliers are testing the market response in China after the healthy pre-holiday replenishment activities last week,” a local trader informed. 

A major trading house maintains spot homo-PP originated from the Middle East and India at $1110/ton CFR China, while slightly cutting Saudi HDPE and LLDPE film by $5/ton to $1035/ton with the same terms. The source said among all the grades, HDPE film is the weakest performing cargo at the moment due to the ban on single-use non-biodegradable plastic bags. “We are monitoring the LLDPE and LDPE market closely to take positions. International suppliers are having lower availability, which means the market might be nearing the bottom,” the source added. 

In the domestic market, total PP and PE inventories at Sinopec and CNPC’s warehouses piled up 90,000 tons throughout the long weekend to 780,000 tons as of 15 June 2021, which is much in line with the market expectation. 

“The post-holiday stock levels are manageable, which means local sellers might attempt to keep offers firm in the coming days. In the meantime, demand has yet to show any signs of strong improvement, especially among export-oriented manufacturers given the shipping costs issues,” another market source added.