Lacklustre year-end

09 December 1996 00:00  [Source: ACN]

Prices come under renewed pressure as Chinese buying slows down

PE: Markets were quieter and prices were under pressure after Chinese buying slowed down. The expiry of import licences had prompted a rush of purchasing in October and November, but the number of enquiries and fixtures for December shipments was lower.

HdPE: South Korean producers offered film grade at US$850-860/tonne cif Hong Kong and China for December shipments. Fixtures were concluded at US$840-850/tonne cif.

The price gap between film grade and injection and blow moulding grades widened. Offers from South Korean producers for the latter were US$840/tonne cif Hong Kong but buyer ideas were below US$800/tonne cif. December fixtures were settled at US$780-790/tonne cif Hong Kong and China.

Indian markets were dead. December offers were US$840-850/tonne cfr India for film grade, but they were not taken up. Only a few fixtures were concluded for December at US$800/tonne cfr or lower.

Thai producers sold film grade at the same level as November fixtures. Prices were US$820-830/tonne cfr SEA.

LldPE: Prices were under pressure and buying interest was limited. Sales of film grade were settled at US$790/tonne cfr Pakistan for December delivery. Few fixtures were concluded to SEA destinations. Prices were US$780-800/tonne cfr SEA.

Fixtures confirmed in mid-November to China were settled at US$820/tonne cif. But buying ideas have since dropped to US$760-780/tonne cif China for December shipments.

LdPE: South Korean producers said availability was tight, with most sales made to China and SEA. December shipments of film grade were concluded at US$920-930/tonne cif China. Buying ideas have since slipped by US$20-30/tonne. Producers expect volumes sold in January to be better, but have yet to receive any enquiries for January fixtures to China. Sales to SEA buyers were settled at US$900-920/tonne cfr for December.

PP: Demand was lacklustre and suppliers expect it to weaken further. Buyers adopted a wait-and-see approach as new capacity comes onstream. Buying interest from China and India was especially weak, sources said. Chinese import licences have expired and new ones have yet to be issued. New capacity in India has reduced imports.

The gap between Indian buyer and seller ideas widened. South Korean producers offered film grade to India at US$820-840/tonne cfr for December shipments but buyer ideas were US$760-780/tonne cfr.

Sales to Pakistan were concluded at US$800/tonne cfr for film grade and US$790/tonne cfr for injection and raffia grades.

Thai producers were unsure how the reduction in import duty scheduled for 1 January 1997 will affect markets (ACN 9 December p23).

December offer prices to Hong Kong were US$820/tonne cif for film grade. Fixtures of film grade were concluded at US$800/tonne cif Hong Kong.

Prices of injection and raffia grades were US$760-770/tonne cif Hong Kong. General-purpose block copolymer was sold at US$870-880/tonne cif China and Hong Kong for December. However, buyers continued to push for lower prices. In SEA, copolymer sales were settled at US$830-840/tonne cfr for December.

Bulk polymer prices - US$/tonne
	NE Asia	SE Asia
HdPE
Film grade	840-850	800-830
Blow moulding and injection moulding	780-800	780-790
LldPE
GP film grade	780-800	780-800
LdPE
GP film grade	920-930	900-920
PP
Film grade	780-800	780-800
Raffia and injection moulding	760-770	760-870
GP copolymer	870-880	830-840
PS
GP crystal	620-630	650-680
High impact	680-700	700-750
ABS
GP grade	900-950	900-950
PVC
GP suspension	670-680	650-670
The above prices are a guide to market levels and were compiled by the ACN team in the middle of the week before publication. Prices are on a cif basis for NEA and cfr basis for SEA for December shipment. Special grades or material will command premiums.

PS: Prices fell to US$620-630/tonne cif Hong Kong for general-purpose PS (GPPS) with December arrival. Sales were reported as low as US$600/tonne cif Hong Kong. Prices for high-impact PS (HIPS) were US$680-700/tonne cif Hong Kong.

Buying across Asia and even in China has steadily declined since end-October. Producers had hoped buying from China would be strong in December because import licences will expire at year-end.

Dow Chemical Pacific cut its list price by US$42/tonne in November. Chinese and Hong Kong markets are not expected to pick up until after the Lunar New Year. Hong Kong's two domestic producers, Dow and Hong Kong Petrochemical, are preparing for turnarounds in January.

Prices were US$650-680/tonne cif SEA for GPPS and US$700-750/tonne cif SEA for HIPS. Buying in SEA remains flat, especially from large OEMs (original equipment manufacturers) making computers and consumer electronics, due to a year-long industry downturn. Some end-users in the region have cut work weeks from six days to five.

ABS: Markets weakened further. Prices have fallen about US$50/tonne to US$900-950/tonne cif Asia since November. List prices stayed at US$1000/tonne cif Asia, but very few bulk sales were priced that high.

Operating rates were at 70-80%. Producers are already bracing themselves for a hard year in 1997. Prices are expected to stay low in January. Producers do not see much hope of raising prices until after the Lunar New Year.

PVC: A lack of imports from Europe, Japan and the US was helping to boost prices for December. Prices were US$670-680/tonne cif China for general-purpose suspension, an increase of US$10-20/tonne from November.

Strong domestic sales for December have kept Japanese material at home (ACN 9 December p24). Japanese traders are insisting on US$700/tonne cif China for further export sales in December.

Japanese producers have reportedly sold all their export uantities for Dec-ember. January offers from producers were at US$700/tonne cif China.

US and European exporters to Asia were also giving firm offers at US$700/tonne cif Asia. Asian players were surprised by the lack of US exports, which are usually higher in November and December when domestic markets slow down.

Prices in SEA continued to be weak. New capacity and weak demand in the region are keeping prices down, at US$650/tonne cif SEA for December delivery. However, a few deals were reported at US$670/tonne cif SEA. Low prices were discouraging Japanese and South Korean exports to SEA.

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