SINGAPORE (ICIS)--The Asian market for non-dutiable C6 metallocene linear low density polyethylene (MLLDPE) has entered a stage of stability, now that it reaches a balance on supply and demand following recent production hiccups.(Source: imageBROKER/REX/Shutterstock)
The supply situation for May cargoes has since improved and more supply is on the horizon when a local Indian producer will be back on track to supply C6 MLLDPE.
One southeast Asian producer, which is a major supplier of non-dutiable C6 MLLDPE to India, kept offers stable this week following some production issues in April.
Offers for southeast Asian C6 MLLDPE May loading cargoes were largely available at $1,280-1,300/tonne CIF (cost, freight and insurance) India.
Although several deals were concluded at $1,270-1,280/tonne CIF India, most buyers pegged their buying indications at $1,250/tonne CIF India.
Meanwhile, a bearish sentiment lingers on the back of a persistently wide price gap between C4 LLDPE and C6 MLLDPE in India.
A widening price gap calls for a potential decline in C6 MLLDPE prices and vice versa. C4 LLDPE is the commodity grade of C6 MLLDPE.
Demand for C4 LLDPE imports remains subdued amid ample supply of competitively-priced domestic product.
C4 LLDPE film prices remained largely below $1,000/tonne CFR (cost and freight) India and were assessed at $950-990/tonne CFR India according to ICIS data on 3 May.
Most C6 MLLDPE buyers purchased their cargoes on a need-to basis as current offers for direct import are similar or slightly below to those of imported cargoes sold by local traders in USD equivalent.
Local market prices were in the range of 94-95 Rupee/kg or around $1,290-1,300/tonne equivalent in US dollars.
As a market practice, direct imported material is usually traded or sold in US dollar on CIF basis, while imported cargoes sold by local traders are priced in lndian rupee.
The prices for imported cargoes will then be calculated to levels in US dollar equivalent.
Some converters opt to draw down on their existing inventory for May and possibly purchase locally-produced C6 MLLDPE cargoes in June when they are available.
Most market players uphold a cautious sentiment as local cargoes could be offered at more competitive prices which will, in turn, exert pressure on import prices.
Focus article by Felita Widjaja