30 July 2010 11:03 [Source: ICIS news]
By Rainy Ma
SINGAPORE (ICIS)--Spot prices of linear low polyethylene (LLDPE) in China’s domestic market jumped by as much as CNY1,000/tonne ($147.5/tonne) or 8% in two weeks, snapping three months of declines as importers took advantage of an open arbitrage window, traders said on Friday.
The price spike, however, maybe short-lived since ?xml:namespace>
Current import prices of LLDPE into
Producers in Asia and the Middle East usually jump on the chance to sell the material into
Chinese domestic spot LLDPE prices, meanwhile, were at CNY9,300-9,800/tonne ex-warehouse (EXWH) on Thursday, according to market players, as major producers Sinopec and PetroChina raised their spot LLDPE ex-works prices from CNY8,800/tonne to 9,600/tonne in the past two weeks.
Meanwhile, LLDPE futures contracts traded on the Dalian Commodity Exchange (DCE) had been rising since July, in line with strong crude prices. September LLDPE contracts were trading at CNY9,800/tonne on Thursday, while October contracts were pegged at CNY10,300/tonne.
But the general uptrend in spot prices may not last long given strong supply from the 600,000 tonne/year plant of Sinopec Zhenhai Refinery Tianjin Petrochemical and the 450,000 tonne/year facility of Sinopec Tianjin Petrochemical Co, market sources said.
Some downstream buyers, concerned that a continued price uptrend may ensue, had started procuring cargoes and may have built enough inventories in the past two weeks, they said.
“Offers are higher this week, but not many buyers were willing to buy at those prices as some still perceive the demand as slow," said a key importer in
“It’s hard for the price hike to continue, since the supply surplus needs to be digested. The ample supply would stress the market throughout the second half of the year,” a Shanghai-based trader said in Mandarin.
“The rapid increase in prices halted on Thursday, indicating weak demand support,” he added.
With additional reporting by Ong Sheau Ling
($1 = €0.76 / $1 = CNY6.78)
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