Local PP and PE prices in China have risen to their highest levels since the end of the Chinese New Year holidays in February as per the pricing service of ChemOrbis. The immediate post-holiday period brought price decreases as the market faced oversupply issues and demand was not as good as sellers had hoped, but prices have regained some lost ground recently as energy costs have remained firm and a slate of upcoming regional shutdowns has helped ease the oversupply situation somewhat. While sellers generally acknowledge that demand has yet to meet their expectations, sellers are hopeful that buying interest will pick up after the upcoming Labor Day holidays.
According to data from ChemOrbis Price Index, domestic homo-PP prices on an EXW China basis declined $78/ton during the first full month after the Chinese New Year holidays before the initial downward trend bottomed out around the middle of March. Local PP prices have since rise $66/ton and now stand only $12/ton short of the levels reported immediately before the holidays. A distributor stated that they received CNY100/ton ($16/ton) higher prices from a domestic producer at the start of the week. “Domestic producers are standing firm on their prices and we believe that further increases may be possible if demand begins to pick up after the Labor Day holidays,” the distributor stated. Another distributor also reported receiving CNY100/ton ($16/ton) increases from a domestic producer. “We lifted our prices in accordance with our higher replenishment costs,” the distributor added.
Domestic PE prices have followed a similar trend, with firmer prices in recent weeks largely erasing the declines witnessed right after the holidays. HDPE film prices on an EXW China basis fell $60/ton in the first six weeks after the holidays before changing direction towards the end of March to currently stand just $18/ton below the levels seen just before the holidays. LLDPE and LDPE prices have exhibited greater price volatility than HDPE over the past year and LLDPE prices in the local market posted a steeper drop of $132/ton in the first five weeks after the holidays before rebounding to be currently quoted $20/ton below their pre-holiday levels.
According to ChemOrbis, a distributor based in Ningbo reported receiving CNY50-250/ton ($8-40/ton) increases from domestic producers. “We are hoping to be able to conclude deals at higher levels this week. Prices are gaining ground on the strength of stronger LLDPE futures prices, which have risen by CNY240/ton ($39/ton) week over week on the Dalian Commodity Exchange,” the distributor stated. Another distributor reported receiving CNY100/ton ($16/ton) increases from a domestic producer. “We believe that prices will stabilize around these levels as buyers will resist any further price hike attempts,” the distributor commented.