By John Richardson
A SURGE in polyethylene (PE) shipments to China has exerted further stress on a market that continues to perform exceptionally badly.
Total PE imports in August (the latest figures availabe) rose to 817,277 tonnes from 681,100 tonnes in July. Low-density PE (LDPE) shipments rose by 27%, high-density (HDPE) by 21% and linear low-density PE (LLDPE) by 15%.
"Traders have speculated on a strong recovery in demand from the second quarter of next year, when China's new leadership is firmly in place. Once they are in place, they will be able to introduce more accommodative growth policies," said an industry source.
"Meanwhile, current demand is very weak with the negative sentiment made worse by the fact that the surge in imports has gone into inventory. Local distributor stocks are very high. Demand growth for 2012 will be flat."
Asian pricing for the week ending 12 October fell by $5-45/tonne, according to ICIS pricing.
The blog thinks it is a big risk to assume that there will be a smooth transition of power once next month's selection of new Politburo members is out of the way. China will also still confront deep structural problems in 2013 and beyond that even the most competent, and reform-minded, set of new leaders would struggle to deal with.