Leading to a poor demand for PP and PE buyers are delaying their purchase.
Leading to a poor demand for PP and PE buyers are delaying their purchase. Hence numbers of Chinese producers have announced large reductions on their offers for PP and PE at the begging of the week. The buying has been delaying until a degree of stabilization is reached in upstream markets. In this case sellers are trying different ways by lower offers to attract the interest from the buyers. However, few of the sellers are maintaining the original price this week and consider some discounts for firm birds.
In the past two years, several PP producers have announced decrease of CNY250-550/ton (US$37-81/ton) to attract buying interest on their offer for homo-PP injection and raffia, and of CNY650/ton (US$95/ton) for PP block copolymer. To maintain price competitiveness with other producers several producers commented that they were also supported in their decision to reduce their prices inside the country. Advent of material from Sinopec Zhenhai’s new 300,000 tpa PP plant has also lent support to the downward movement in domestic prices. Despite price reductions observed over the past few days, distributors and converters are still unwilling to place orders for now as they are feeling uncertain about the future direction of the market and would prefer to wait and observe further developments.
Domestic producers began the week in the PE market by announcing price of CNY100-300/ton (US$15-44/ton) for HDPE film, CNY200-500/ton (US$29-73/ton) for LDPE film and CNY200-700/ton (US$29-102/ton) for LLDPE film, attributing their price cuts to their hopes of spurring greater sales during a downward trend. Producers also pointed to lower prices in the distribution market as well as ongoing losses in crude oil and naphtha prices as additional factors spurring them to reduce their offer levels. On the buyers’ side, both distributors and converters are showing reluctance to engage in trading activity for the present, with distributors complaining about their lack of a clear idea as to where the market might stabilize while converters are complaining of a slow-down in the number of end product orders they have received.