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.”