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Asian ethylene trades above import LLDPE in China

by ChemOrbis Editorial Team -
  • 04/12/2015 (03:18)
Spot ethylene prices have been rising steadily in Asia since mid-September on supply concerns. On the contrary, import PE prices in China have been falling gradually since Chinese players came back from the National Day holiday celebrated in mid-October. The two markets converged last week as was highlighted in a previous ChemOrbis Daily Headline titled Import PE prices near to par with ethylene in China .

This week, further decreases witnessed in the PE market, particularly for LLDPE, brought spot ethylene prices above the average import LLDPE price according to ChemOrbis Price Index, as can be seen from the graph below prepared by ChemOrbis Price Wizard.

This is not a sustainable situation, many players concur. “This is not the first time PE falls under ethylene; however, the market has to correct itself soon in order to bring the market back into balance,” said a player.

The question players are now asking is whether ethylene will need to fall or PE prices will need to rise. "There is a mismatch between buyers and sellers in the ethylene market, but sellers have been unwilling to lower their offers so long as ethylene supplies remain limited in the spot market," another player commented.

PE players in China, meanwhile, continue to wait for price decreases in the midst of weak demand. "Buyers would normally be building up some stocks ahead of the Chinese New Year holidays at this time, but we have not seen any real pick-up in demand yet. We export most of our bags to the US and we regard our sales as a bit disappointing," the buyer stated.
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