11 May 2012 13:17 [Source: ICIS news]
SINGAPORE (ICIS)—The sentiment of Indian and Pakistani importers has weakened further because of the emergence of Chinese polyethylene (PE) re-exports offers, industry sources said on Friday.
Pakistani importers are already reporting high inventory levels and the depreciation of the Indian rupee against the US dollar has kept import interest low.
According to the importers, the lower re-export prices from ?xml:namespace>
Re-export offers from Chinese traders to Pakistan emerged on 10 May for Iranian originated low density PE (LDPE) and high density PE (HDPE) film at $1,340-1,350/tonne (€1,032-1,040/tonne) FOB (freight on board) China, Karachi-based traders said.
“These offers are indeed very attractive, in comparison with the transacted GCC (Gulf Cooperation Council) cargoes over the past two weeks,” a Karachi-based trader said.
Comparatively, May parcels loaded from the GCC region were previously booked at $1,500-1,520/tonne CFR (cost & freight)
Although the Chinese re-export offers of Iranian cargoes were much lower than the fixture levels for GCC cargoes,
US-led sanctions have led to many banks being unable to open credit terms for Iranian cargoes.
In addition, the EU ban on European insurers providing coverage for Iranian petrochemical cargoes insurance for vessels reduced the availability of vessels to load Iranian cargoes.
“For HDPE film particularly, there is already a high stock level of Iranian origins in the domestic market, which were smuggled through for several months,” said another Karachi-based trader.
“It is too risky to import more Iranian cargoes. Prices may just collapse amid flat demand,” he added.
Chinese and Dubai-based traders have also offered re-exports to Indian importers.
Dubai-based traders were offering early-week re-exports of Thai linear low density PE (LLDPE) film material, loading from
For LDPE film, Chinese traders offered Iranian re-exports, loading from
“More and more offers for re-exports from
The persistent depreciation of the rupee has kept the import interest of Indian traders and converters low.
“These [re-export] offers will not be translated to deals. Most converters have already bought their May cargoes earlier this month from the GCC producers,” another Mumbai-based trader said.
Average weekly prices for LDPE film were at $1,495/tonne CFR Mumbai and at $1,475/tonne CFR Mumbai for LLDPE film for the week ended 4 May, according to ICIS.
($1 = €0.77)
Chow Bee Lin contributed to the story.
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