China’s import PP, PE markets climb to more-than-one-year highs

China’s import PP markets turned upwards following a month-long stability, while imported PE film grades were quoted higher for two weeks in a row. A shortage of import supply, especially for Middle Eastern origins, justified sellers’ hike attempts. Adding to the scenario were the increase in freight rates and a cautious improvement in demand, albeit limited.

PP prices hit highest levels since Mar 2023

Over the week ending on May 17, the overall ranges of import PP offers were assessed $10-20/ton higher from a week earlier at $910-990/ton CIF China, cash for homo-PP raffia and inj., and $20-30/ton higher at $940-1020/ton for PPBC inj. with the same terms.

Middle Eastern materials were quoted stable on the high ends and $10-30/ton higher on the low ends, at $910-940/ton for homo-PP raffia and inj. and $940-970/ton for PPBC inj., both on a CIF China, cash basis.

The weekly average data Price Index shows the prices of both grades have reached their highest levels since mid-March 2023.

LD, HD film at nearly two-year highs

In the PE markets, sellers continued to recoup margins through higher prices, but the pace of gains somewhat faltered when compared to the previous week. Northeast Asian producers kept their high-end offers unchanged, while the low ends mainly saw additional increases for Middle Eastern cargoes.

Import prices for all origins were assessed stable at $1050-1130/ton for LDPE film, stable to $20/ton higher at $970-1060/ton for HDPE film, and stable to $10/ton higher at $950-1020/ton for LLDPE film, all on a CIF, cash basis.

Following the latest round of gains, the weekly average price of LLDPE film climbed to its highest level since early April 2023, while LDPE and HDPE film prices hit nearly two-year highs.

Import tightness triggered upturn

A spate of plants has undergone maintenance turnarounds in the Middle East, China’s big supplier of polyolefin, leading to a lack of import supply. That primarily revived sellers’ confidence, encouraging them to issue higher offers following several weeks of rollovers.

A producer’s source noted, “Regional supply has tightened substantially amid the middle of the turnaround season, with many Middle Eastern and Asian plants shutting down for maintenance.” “Import offers are few and far between as Q2 is a heavy maintenance quarter,” said a trader who raised their PE offers in two straight weeks.

Rising shipping costs aided sellers’ confidence

In addition, the recent rally in shipping freight rates, which was mainly attributed to sustained capacity demand, blank sailing programs, and the Red Sea crisis, provided a shot in the arm for sellers of imported PP and PE.

A Taiwanese producer applied fresh hikes to its PP pricing for China after two months, pointing to surging freight rates. A source at the producer commented, “We increase our offers since shipping costs have risen sharply.” He added, “PP prices will likely hold at current levels in the near to medium future given the long-term increases in energy and feedstock costs.”

But tepid demand kept upswings in check

While higher offers lured buyers back into the market to hedge against further increases and a strong buying appetite was reported for some grades, notably for PPBC inj., the overall weakness in demand still put a cap on the applicable hikes.

The financial issues, particularly at small-scale businesses due to limited order entry, combined with the end of the agriculture season continued to squeeze demand for raw materials. Converters approached the markets with cautiousness and largely made purchases for immediate requirements.

A Zhejiang-based trader reported, “Downstream factories are mostly maintaining purchases tied to basic needs, showing low enthusiasm for procurements. The market’s ability to consume raw materials is limited, resulting in an overall sluggish state of demand.”