Polmer trends: HdPE buyers retreat

20 September 2004 00:01  [Source: ACN]

After a surge in prices during August, markets slow as buyers assess decline in Chinese domestic prices. LldPE, PP and PS also see thin trade. But ldPE, ABS and PVC are robust

HdPE: Markets in NEA witnessed a lull last week, after the brisk activity and soaring prices in August, as customers sought to assess the impact of sliding Chinese domestic prices. A further factor slowing business was the impending week-long Chinese national holiday in early October.

Prices had risen by US$130–140/tonne for September cargoes from August to US$1160–1190/tonne cfr China, but had been stagnant for the past two weeks, despite tight supply.

Chinese domestic prices for the injection-moulding grade were last week at Rmb11 600/tonne delivered. Adding to the unease were rumours that some local producers were offering material at below Rmb11 000/tonne delivered.

Prices of film-grade cargoes were even lower at Rmb10 600–10 900/tonne delivered.

A South Korean producer was offering injection-moulding material at US$1200/tonne cfr China, but was worried it may have to reduce its offers due to customer resistance arising from the surge in ethylene feedstock costs.

LdPE: Demand was robust in China owing to the onset of the agricultural season.

One SEA producer said it had already sold out its film-grade cargoes for September, having achieved an increase of US$200/tonne over August prices, to US$1380/tonne cfr SEA.

Producers in NEA and SEA were looking at the direction of the Chinese market, which was uncertain, before making their October offers.

LldPE: Prices were at US$1200/tonne cfr China, US$170/tonne higher than a month earlier. But this was no reflection on last week’s market direction, as no deal had been reported in NEA for more than two weeks, with Chinese customers adopting a wait-and-see stance.

PP: High demand ensured brisk business earlier in the month, when prices climbed to US$1200-1300/tonne cfr China, a US$300/tonne increase from early August. However, markets were relatively quiet last week, as price ideas softened a little, with buyers holding back because of declining crude values.

A producer was last week offering raffia-grade at US$1200/tonne cfr China for September, and hoping to settle at US$1150-1160/tonne cfr China.

Offers for October shipments were targeted at US$1250/tonne cfr China.

In SEA, a September deal was settled at US$1130/tonne cfr SEA, US$80-100/tonne higher than four weeks earlier.

Prices of block copolymer were at US$1230-1250/tonne cfr SEA, US$100-120/tonne higher than in August.

PS: Trade was thin as buyers adopted a wait-and-see stance, believing that PS prices would soften further on decreasing styrene costs. A 500-tonne high-impact PS (HIPS) deal was concluded at US$1500/tonne cfr Hong Kong, US$40-70/tonne higher than in the previous month. In SEA, HIPS deals were concluded at US$1500-1530/tonne cfr SEA, US$20-50/tonne lower than in the previous month. Prices for general-purpose PS (GPPS) were at US$1470-1480/tonne cfr Hong Kong, US$90-100/tonne higher than in the previous month.

In the Taiwanese domestic market, HIPS deals were concluded at US$1620-1630/tonne delivered, US$150-160/tonne higher than in the previous month, while GPPS deals were concluded at US$1570-1580/tonne delivered, US$130-140/tonne higher than in the previous month.

In the Chinese domestic market, prices moved up by Rmb500-700/tonne, with deals settled at Rmb14 000-14 100/tonne delivered for GPPS and Rmb14 500-14 700/tonne delivered for HIPS.

A producer in Taiwan said that buyers in Hong Kong had some inventories and were holding off procurement in anticipation of softening prices. The producer added that styrene costs were still relatively high and it was producing at 70% capacity, down from its original 100% capacity. The producer also added that October offers were likely to decrease if styrene costs remained at the US$1300/tonne cfr Taiwan level.

A Japanese trader said that demand was coming mainly from the audio and home appliances segments in Hong Kong and was likely to stay strong till the beginning of October.

ABS: Prices remained robust despite softening styrene costs, as producers were waiting to assess the downward trend of styrene in the coming few weeks. September deals were concluded at US$1600/tonne cfr SEA, US$30/tonne higher than in the previous month. A similar trend was observed in NEA where deals were concluded at US$1600-1620/tonne cfr Hong Kong, US$50-70/tonne higher than in the previous month.

A SEA producer said that prices were likely to soften in tandem with softening styrene costs. The producer added that an unusual trend was emerging from the electronics and plastics sectors. Demand from both sectors had decreased by 30-40% from last month and this was atypical as September-October was the peak production season. The producer said that demand from the US was dwindling, and that had resulted in a downturn in demand, possibly all the way through to the end of Q4.

But a Japanese trader said that demand was still very good, especially from the toy, audio, and electronics segments. The Japanese trader added that demand was likely to increase as ABS prices were expected to fall gradually in the next few weeks.

PVC: An October shipment was negotiated at US$990-1000/tonne cfr China, US$110-120/tonne higher than in the previous month. In the Chinese domestic market, deals were concluded at Rmb9200-9300/tonne delivered, Rmb600-700/tonne higher than in the previous month.

The PVC price hike was also supported by an upward movement in vinyl chloride monomer costs which had hit US$800-820/tonne cfr China for October cargoes, US$50-70/tonne higher than in September.

BULK POLYMER PRICES, US$/TONNE

	NE Asia	SE Asia
HdPE
Film grade	1160-1190	1150-1180
Yarn and injection moulding	1160-1190	1170-1190
LdPE
GP film grade	1380	1380
LldPE
GP film grade	1200	1200
PP
Film grade	1200-1300	1130
Raffia and injection moulding	1200-1300	1130
GP copolymer	1230-1250	1230-1250
PS
General purpose	1470-1480	1470-1480
High impact	1500	1500-1530
ABS
GP grade	1600-1620	1600
PVC
GP suspension	990-1000	990-1000
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 September arrival shipment. Special grades or material will command premiums.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly