SINGAPORE (ICIS)--China’s polyethylene (PE) import prices are expected to increase this month after fluctuating at a narrow range in March, on likelihood of reduced May-cargo arrivals which should ease market pressure arising from high inventory.
On 4 April, LLDPE import cargoes were offered at $1,030-1,040/tonne CFR (cost & freight) China, up by $5/tonne compared the weekly assessment on 29 March, according to ICIS data.
Container ships docked at the Yangshan port in Shanghai, China (Source: AP/REX/Shutterstock)
Scheduled turnarounds of facilities in Asia and the Middle East from March to June would mean lower availability of May spot cargoes to the Chinese market.
Qatar Petrochemical (QAPCO) shut part of its LDPE and LLDPE plants in Masaieed in mid-March; while Reliance Industries’ LDPE unit in Jamnagar, India, was taken off line in end-February, and will restart in early April.
In Kuwait, EQUATE Petrochemical shut one of its HDPE units in Shuaiba for a half-month regular maintenance from mid-March, according to a source close the company.
In China, plastic resin inventories of major domestic producers Sinopec and PetroChina on 4 April have remained elevated at 870,000 tonnes, but had declined by 9.4% from 1 March.
The sharp decline in inventory was attributed to strong demand ahead of the implementation of the three-percentage point cut in manufacturing value-added tax (VAT) rate to 13% on 1 April.
More domestic buyers rushed to procure cargoes while the 16% VAT was still in place as they will be able to claim higher input tax in production starting this month.
The VAT reduction meant lower prices across all petrochemicals.
Most end-users welcomed the policy as it translates to lower cost of feedstock, but continued tightness in cash flow prevent them from stocking up on more resins.
Lower inventory would ease the selling pressure among local producers and distributors, but there are still concerns over concentrated arrivals of Iranian cargoes after months of delays due to US sanctions.
China’s imports of Iranian PE in February surged 51.1% month on month to 155,614 tonnes, official data showed.
Focus article by Angie Li