Bullish sentiment ahead of Lunar New Year will likely push up PE prices across Asia in early January
The selling indications of polyethylene (PE) in the Middle East and India are likely to rise for January shipment in tandem with the markets in China and southeast Asia, market participants said on 19 December. High prices in Asia will be an impetus for a rise in offers, they conceded.
For example, the low density polyethylene (LDPE) film prices on CFR (cost & freight) China basis stood at $1,680-1,740/tonne (€1,226-1,270/tonne) in the week ended 13 December, up from $1,649-1,690/tonne CFR China four weeks before, ICIS data showed.
Local PE producers in Thailand raised their price offers again the previous week, citing tight supply and better-than-expected export demand as bullish factors.
“Demand is not great in India but China is buying [PE] at higher prices. So the offers will increase naturally,” said a market participant in Mumbai.
The Indian PE consumption has been subdued so far because government spending has been reined in ahead of the elections in May next year, he added.
Meanwhile, some offers for linear low density polyethylene (LLDPE) film were at $1,540/tonne CFR Mumbai for January of Saudi-origin material, market participants said.
The bullish sentiment ahead of Lunar New Year in end-January will likely push up PE prices across Asia in early January, market participants said.
For the LDPE grade, prices in China hit their highest in nearly three years in early December, because of reduced local production and imports, industry sources said on 13 December.
China may seek to import more PE amid possibly unplanned cracker shutdown, which might have affected the supply of the downstream products.
Shanghai SECCO Petrochemical shut its 1.2m tonne/year cracker in Shanghai, China, on 17 December. The cracker is expected to be down for about three days.
The reason for the shutdown is not immediately clear, but some market sources said the cracker may be experiencing a technical glitch.
China, the world’s second-biggest economy after the US, is estimated to have imported a combined volume of 1.32m tonnes of polyethylene (PE) and polypropylene (PP) in November, up by 26.6% from the previous month, local traders said.
Some 841,000 tonnes of PE and 480,000 tonnes of PP were brought into the country in November, they said.
Comparing the figures with the official data for October imports, PE imports in November increased by 25.7%, while PP imports were up by 28.4%, the traders said.
China Customs’ data on November imports is expected to be released around 24 December.
In the meantime, new offers for January in the Gulf Cooperation Council (GCC) and East Mediterranean (East Med) regions would emerge in the coming days, market participants said.