18 April 2012 04:58 [Source: ICIS news]
By Chow Bee Lin
Trading of both plastic resins has been capped in recent weeks given at least a $50/tonne (€38/tonne) difference in the buying and selling ideas for April shipments, with expectations that the price gap could increase for May cargoes, regional traders and producers said.
Selling indications for the benchmark linear low density (PE) and PP yarn grades were in the mid-$1,400/tonne levels to above $1,500/tonne CFR (cost and freight) China, while buying ideas were in the high $1,300/tonne levels to the low $1,400/tonne CFR China levels, market sources said.
Bids for imported resins have been capped in recent weeks by persistently lower domestic retail prices, Chinese traders said.
In the week ended 13 April, the average retail prices of the benchmark LLDPE were at yuan (CNY) 10,500/tonne ($1,667/tonne), while those for PP yarn grades were at CNY11,300/tonne on an ex-warehouse basis, according to Chemease, an ICIS service in
These domestic retail prices in
ICIS has assessed the average LLDPE import prices at $1,395/tonne in the week ended 13 April. For PP yarn resins, the average price stood at $1,485/tonne in the same week.
Naphtha-based PE and PP producers in northeast and southeast Asia are unlikely to lower their price offers for May shipments as their margins are being squeezed by sharp increases in values of feedstocks ethylene and propylene in the region, according to northeast Asian resin producers.
“What’s the point of producing PP when it is selling at below the propylene feedstock prices,” a northeast Asian producer said.
Some PE and PP producers in northeast
“We’ll reduce PP output in May and sell propylene feedstock if PP prices don’t increase, and propylene prices keep going up,” the second northeast Asian producer said.
According to ICIS, the variable margins of naphtha-based low density (PE) producers in northeast
For naphtha-based PP producers in northeast
Price discussions for May shipments of PE and PP are expected to be revved up during the four-day Chinaplas exhibition in
($1 = €0.76 / $1 = CNY6.30)
Additional reporting by Amy Yu, Angie Li
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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