China HDPE price falls by 3.2% in early December on supply increase

07 December 2011 09:49  [Source: ICIS news]

SINGAPORE (ICIS)--China’s average HDPE price has decreased by 3.2% month on month to yuan (CNY) 10,785/tonne EXWH (ex-warehouse) on 7 December from CNY11,138/tonne EXWH on 7 November, industry sources said on Wednesday.

According to some market players, the price drop is mainly because increased supply. China’s domestic HDPE output was estimated to have risen by 9.8% from about 410,000 tonnes in October to 450,000 tonnes in November, according to data from Chemease, an ICIS service in China.

Most of the cargoes that were imported during the October-November period were at around $1,306/tonne (€980/tonne) CFR (cost & freight) China, which is equivalent to around CNY10,450/tonne after tariffs and value-added tax.

This resulted in a profit of around CNY360/tonne as the ex-warehouse prices of the cargoes were at around CNY10,785/tonne, some distributors in east China said.

As a result, most sellers are reducing their inventories at the lower prices to gain cash to meet their credit terms, a trader in south China said.

In addition, downstream demand is weak because of China’s tight monetary policies, a distributor in north China said.

The falling prices of HDPE may cause the near-term outlook to be bearish as market players will expect the prices to drop further.

($1 = CNY6.34, $1 = €0.75)

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By: Amy Yu

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