16 April 2009 10:21 [Source: ICIS news]
SINGAPORE (ICIS news)--China’s petrochemical giant Sinopec has switched from spot to list pricing for most grades of polyethylene (PE) and polypropylene (PP) on Thursday in response to weak buying interest, local distributors said.
In east China, the producer had set a list price of yuan (CNY) 9,750/tonne ($1,428/tonne) ex-factory for linear low density PE (LLDPE), according to China chemicals market intelligence service ICIS chemease.
Sinopec was offering LLDPE on a spot basis at CNY9,950/tonne ex-factory in east China before it switched to list pricing, according to the service.
Transactions based on list prices were adjusted retrospectively at a time determined by the producer, local distributors said.
The pricing switch was in line with the general expectations of market players since Monday, which had made the market jittery.
Sinopec generally starts selling at list prices when most of its distributors decline to take cargoes at prevailing spot prices. Hence, the switch to list prices was taken as a sign that buying interest was weak and that a downtrend could be imminent, the distributors said.
Concerns that prices could fall had created panic in the market as sellers were unsure if they should immediately offload their stock and buyers were unwilling to purchase new cargoes.
The domestic retail market came under further downward pressure on Thursday following the firm’s move.
Locally produced and imported LLDPE was selling at CNY9,350-9,600/tonne and CNY9,100-9,600/tonne respectively on an ex-warehouse basis, CNY100-200/tonne lower than on Tuesday, according to ICIS chemease.
Domestic retail prices of locally produced and imported PP and PE started falling in the middle of last week when crude values fell below the $50/bbl mark, local distributors said.
($1= CNY6.83)For more on PE, PP visit ICIS chemical intelligence
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