By Chow Bee Lin
SINGAPORE (ICIS)--China’s import prices for low density polyethylene (LDPE) hit their highest in nearly three years this week - at an average of $1,710/tonne (€1,248/tonne) - because of reduced local production and imports, industry sources said on Friday.
This price on a cost-and-freight (CFR) China basis was last seen on 7 January 2011, according to ICIS data.
Local production of LDPE in China had been cut on tight supply of feedstock naphtha amid scheduled turnaround at a number of domestic refineries, they said.
Supply of LDPE grade has been tight since September because of reduced imports from Iran and southeast Asia, industry sources said.
China imported 287,437 tonnes of LDPE from Iran in January-October this year, down by 19.2% from the same period last year, China Customs data showed.
LDPE supply from southeast Asia tightened because of an unplanned shutdown of a 300,000 tonne/year facility in Thailand owned by PTT Global Chemical, and a scheduled maintenance at Petlin’s 255,000 tonne/year LDPE plant in Malaysia
In China, locally produced LDPE film grade resins on average are selling at a premium of around $216/tonne to r imported cargoes because of the tight supply.
Locally produced LDPE film grade resins were selling at Chinese yuan (CNY) 14,400-14,900/tonne ($2,365-2,447/tonne) EXWH (ex-warehouse) this week, yielding import parities of $1,878-1,943/tonne CFR China. Imported cargoes, on the other hand, are selling at $1,680-1,740/tonne CFR China, according to ICIS.
Some Chinese traders expect the tight LDPE supply to ease in January as exports from Iran and southeast Asia are expected to return to normal levels.
China imported an average of 35,000 tonnes/month from Iran in 2012, according to China customs data.
From Thailand and Malaysia, China took in an average monthly volume of 8,300 tonnes and 11,000 tonnes of LDPE, respectively in 2012, according to official data.
($1 = CNY6.09 / $1 = €0.73)Additional reporting by Angie Li, Amy Yu
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