05 November 2009 21:19 [Source: ICIS news]
HOUSTON (ICIS news)--US polyethylene (PE) producers booked high volumes of exports to China for November shipment, but the flood of cargoes may diminish in December, US traders said on Thursday.
“China is still buying some, but they’ve slowed down a bit,” a source said. “If you have product, they are looking to buy - but they are not as aggressive.”
US PE sellers saw a surge of export demand from Asia around mid-October.
Linear low density PE (LLDPE) butene film has remained the strongest product line this week, a trader said, with buying interest starting at $1,200/tonne (€804/tonne) CFR (cost & freight) China.
Another US trader saw buying interest for LLDPE in China at lower levels of $1,170-1,200/tonne CFR.
Demand for high density PE (HDPE) blow moulding has slowed by comparison, the second trader said, with buying interest capped at around $1,150/tonne CFR.
Current HDPE blow moulding export offers from the US Gulf were seen no lower than 47 cents/lb FOB (free on board) in bags, sources said.
A producer was said to be holding an HDPE railcar auction with a starting price at 44 cents/lb ($970/tonne) FOB.
However, a trader earlier this week said HDPE injection and blow moulding railcar prices for export would need to be around 42-43 cents/lb FOB to move more volume to China.
“We’ll have to see what happens, but I think producers have expectations that are about 2-3 cents above what the market can handle,” the source said.
Another trader said US PE producers have hinted that they will try to stay competitive with global market levels, even amid recent increases in ethylene feedstock costs.
The October ethylene contract settled higher by 2.75 cents/lb at 37.25 cents/lb this week.
Major US PE producers include Dow Chemical, ExxonMobil, Formosa, INEOS, Total, Chevron Phillips Chemical, Westlake and LyondellBasell.
($1 = €0.67)
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