17 April 2008 03:12 [Source: ICIS news]
By Chow Bee Lin
SHANGHAI (ICIS news)--A widening gap between buy and sell ideas is expected to hamper China’s polyolefins trade in May, and factors behind it is likely to be one of the key themes at the Chinaplas exhibition starting on Thursday, Chinese traders said.
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Middle East and Asian producers’ initial offers for low density polyethylene (LDPE) at $1,755-1,770/tonne (€1,106—1,115) CFR (cost and freight)
This led one Asian producer to cut its offer by $20/tonne to $1,750/tonne but the firm said buying interest was weak even at the lower price as buying ideas were still $20-30/tonne lower.
Soaring raw material prices and their impact on the plastics processing sector is hence expected to be among the key issues discussed at this year’s ChinaPlas - an annual exhibition which runs from Thursday to Sunday in
“Our customers will probably complain that PE prices are too high and that their margins are squeezed,” a Middle East PE producer said.
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“Chinese processors are facing an increasingly difficult business environment characterised by higher labour costs, a credit crunch, less export incentives and the prospect of weaker demand for Chinese plastic product exports due to the stronger Chinese yuan currency against the dollar,” he said, adding that resin import interest was weak as a result.
HDPE is a key raw material used in plastic bags.
Most Asian resins producers are expected to try driving home the message that high naphtha and monomer feedstock prices supported further resin price hikes for May shipment, traders said.
They added that some
Spot ethylene and propylene feedstock prices surged $80-100/tonne last week to $1,350-1,380/tonne and $1,350-1,400/tonne CFR northeast
But in their push for higher prices, many resins suppliers would be mindful of the need to maintain their market share in
Over 10m tonnes of new PP and and PE capacities are scheduled to come on stream in the
($1 = €0.63)
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