千亿国际娱乐pt

Jan. 15, 2019

China’s spot polyethylene (PE) prices recently rebounded in response to the government’s economic stimulus and tighter supply due to unexpected plant turnarounds, but the market may turn stable to soft ahead of the Lunar New Year holidays.

 

On 11 January, linear low density polyethylene (LLDPE) prices in south China increased by Chinese yuan (CNY) 100/tonne ($15/tonne) week on week to CNY9,150/tonne EXWH (ex-warehouse), according to ICIS data.

Low density polyethylene (LDPE) prices in south China increased by CNY250/tonne over the same period to CNY9,000/tonne EXWH (ex-warehouse), the data showed.

To stimulate the world’s second-biggest economy, China's central bank on 4 January announced a one-percentage point cut on financial institutions’ reserve requirement ratio, effective 15 January, which is estimated to release CNY1.5tr ($219bn) of liquidity.

The first face-to-face trade talks between China and the US since their trade war started in mid-2018 had also raised optimism of reaching a resolution to the dispute that is threatening global economic growth.


Supply of PE in China’s domestic market, meanwhile, is expected to take a hit following unplanned shutdowns, as well as a production cut, at major local facilities.


Producer Capacity tonnes/year Products Shutdown Fujian Refining & Petrochemical 500,000 HDPE/LLDPE 3-9 January Shenhua Ningxia Coal Industry 450,000 HDPE/LLDPE 14-20 January Zhongtian Hechuang Energy Co Ltd 370,000 LDPE 8-19 January PetroChina Sichuan Petrochemical 300,000 HDPE 3-10 January Pucheng Clean Energy Chemical 300,000 HDPE/LLDPE Runs at reduced rates since 4 January.


Inventories in China have been described as “comfortable” as most players have pre-sold their cargoes.


China’s state-owned petrochemical giants Sinopec and PetroChina have recorded a combined PE and PP inventories of around 600,000 tonnes in January 2019, down from about 700,000 tonnes in early December, according to ICIS.


Robust upstream crude futures market also provided upward momentum for spot PE prices, industry sources said, with US crude logging in an 18% jump over 10 consecutive trading sessions.


“Downstream factories are picking up [stocks] for the Lunar New Year… [but] they may leave the market from mid-January, [and] demand will be weaker and weaker,” a trader said.


China will be on a week-long holiday from 4 February for the Lunar New Year celebration.


“Imports from Iran will arrive in mid-January, which will ease imports supply tightness. The prices may be stable to soft then,” the trader said.

Post-holiday, some traders are optimistic about market market.

“Producers’ inventory levels are likely to rise by over 300,000 tonnes during the Lunar New Year holidays based on historical data. The inventory levels may reach less than 100,000 tonnes given the current levels, which has no sales pressure for producers,” another trader said.

Market players expect limited room for further weakness in PE prices before and after the Lunar New Year as spot prices have been at low levels.

 


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