China PE rebounds on restocking, delayed arrivals of Iran cargoes

SINGAPORE (ICIS)–Polyethylene (PE) prices in China have snapped two weeks of declines, buoyed up by restocking activities amid expected delays in arrivals of Iran cargoes, market sources said.

Downstream producers are stocking up on raw material supply ahead of China’s National Day and Mid-Autumn Festival holidays on 1-8 October.

On 27 September, domestic prices in east China were assessed higher by around Chinese yuan (CNY) 50-200/tonne ($8-30/tonne) compared with last week’s prices.

High density PE (HDPE) film was assessed at CNY10,450-10750/tonne; linear low density PE (LLDPE) film stood at CNY9,550-9,800/tonne; and low density PE (LDPE) film was at CNY10,300-10,650/tonne, according to ICIS data.

In the week ended 22 September, LLDPE import prices were assessed at $1,170-1,230/tonne CFR (cost and freight) China, while domestic prices of the material stood at CNY9,400-10,000/tonne ex-tank east China, according to ICIS data.

LLDPE import prices had declined by 2.0% over two weeks from 8 September,, while domestic prices had shed 5.1% over the same period as end-users resisted higher offers, following strong and steady gains since July.

Meanwhile, China’s PE inventories are falling this week amid the restocking activity by downstream producers, while import supply is being curtailed as shipments from Iran – a major PE supplier to China – are facing delays.

Yuan-based import prices of HDPE film in east China were assessed on 27 September at CNY 10,150-10,400/tonne, up by about CNY100-200/tonne from the assessment on 25 September, according to traders.

Iran’s PE plants are either currently shut or running at reduced capacity amid ongoing maintenance at the country’s South Pars gas field from August to end-September, according to Iran-based industry sources.

Among PE plants in Iran, Ilam Petrochemical’s 300,000 tonne/year HDPE was shut in August due to shortage of feedstock ethylene. The company’s July shipments to China were heard to be delayed to November-December.

Amir Kabir Petrochemical’s 300,000 tonne/year low density polyethylene (LDPE) unit in Bandar Imam was also shut in August, while its 300,000 tonne/year LLDPE unit has been running at reduced capacity. The plants were supposed to resume normal operations in early October, a company source said.

Bakhtar Petrochemical’s four PE plants – a 300,000 tonne/year HDPE/LLDPE swing plant in Lorestan; a 300,000 tonne/year HDPE unit in Kermansha; a 300,000 tonne/year HDPE/LLDPE)  swing plant in Mahabad; and a 300,000 tonne/year LDPE unit in Kordestan – have been running at half their capacities since August, an east China-based distributor said.

Meanwhile, some LDPE and HDPE shipments from Iranian producer Arya Sasol to China have been delayed to November, while no shipment information was available for LDPE orders made in September, according to China-based distributors.

In the case of Mehr Petrochemical, HDPE shipments to China were delayed as the company’s 300,000 tonne/year HDPE unit was running at a comparative low rate after the unit had recently undergone two to three weeks of turnaround.

Except for Amir Kabir Petrochemical and Ilam Petrochemical, the other Iranian producers have not confirmed the production status of their plants.


Pictured above: First container ship from Iran docks at the Dapukou terminal, Zhoushan, China – 18 Jun 2012 Dock worker oversees the unloading. The first container ship from Iran anchors at Dapukou container terminal. This is the 7th international service of the port. (Source: Top Photo Corporation/REX/Shutterstock)

Focus article by Angie Li