China PE import offers spike on post-holiday restocking

SINGAPORE (ICIS)–Polyethylene (PE) offers in China’s import market spiked this week on the back of restocking activities by end-users after the Lunar New Year holiday, market sources said on Thursday.

Demand was particularly strong for high density PE (HDPE) and linear low density PE (LLDPE), they said.

Offers for general import HDPE film grade stood at $1,160-1,190/tonne CFR (cost and freight) China, while those for LLDPE film grade stood at $1,140-1,190/tonne CFR China, up by around $20-30/tonne from pre-holiday levels.

China was on holiday on 27 January to 2 February for the Lunar New Year celebration.

But prices for low density PE (LDPE) were weighed down by strong arrivals of deep-sea cargoes, particularly from Iran, local distributors said.

Local distributors were offering LDPE film grade at $1,320-1,340/tonne CFR China, lower than their pre-holiday quotes. Some suppliers in southeast Asia and the Middle East, on the other hand, have quoted higher offers of $1,360-1,390/tonne, in line with the general uptrend in the overall PE market.

“Our costs for some deep-sea [LDPE] cargoes from Mexico and America were mostly lower than $1,300/tonne,” an import trader said.

Market sentiment, nonetheless, remained bullish for the overall PE market in China amid expectations that import supply could tighten due to production problems at some facilities in the Middle East, industry sources said.

Qatar Petrochemical Co (QAPCO) was heard to have cut operations at its PE plants in Mesaieed in January due to a cracker problem, while in Saudi Arabia, PetroRabigh was heard to have shut down its 600,000 tonne/year LLDPE unit in January.

Some market players, however, doubt the uptrend in PE prices could be sustained, citing high inventories among local producers and at ports immediately following the week-long holiday in China.

Focus article by Anglie Li

Top photo: Polyethylene (PE) is used in plastic bags. (Source: Photofusion/REX/Shutterstock)