31 December 2008 04:24 [Source: ICIS news]
By Chow Bee Lin
SINGAPORE (ICIS news)--Polyethylene (PE) and polypropylene (PP) prices in China and southeast Asia may soften in mid February as regional producers continue to raise operating rates despite persistent weak demand, Asian producers and traders said.
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“Downstream demand has been weak since the global economy started going downhill, but a tighter supply caused by regional production cuts have been supporting prices,” a South Korean trader said.
Resins demand in
“Plastics processors in
“Global plastics demand is unlikely to improve in the first half next year as the key application sectors will be grappling with a slew of problems led on by the global downturn, such as production and job cuts, shrinking profits and even losses,” an global PP supplier said.
“Asian plastics demand is unlikely to improve much next year, hence any increase in supply from current levels is likely to push prices down,” the PP supplier added.
The average PE and PP weekly prices in
PE and PP resins are used in various sectors, including construction, automotive, electronics and electricals, and consumer packaging.
Some regional producers were likely to raise their production in January but supply would still be relatively tight as the plants in
“Producers in China and Taiwan are expected to either maintain low output rates or shut their plants in end January for up to 10 days due to the Chinese New Year holidays,” he said. Most Chinese factories will be shut two to three weeks prior to the holidays, which officially start 26 January.
Some traders said they believed a large volume of shipments have been scheduled to arrive in China and Vietnam in early February to avoid the Chinese New Year holidays, and that would add to the downward price pressure in these markets.
There were also concerns that the flurry of
The benchmark high density PE (HDPE) and yarn grade PP traded at $800-850/tonne and $720-780/tonne, on a CFR (cost and freight) China and southeast Asia basis respectively in the week ended 19 December, according to ICIS pricing.
($1 = €0.71)
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