Polymerupdate Asian pricing: Demand picks up, and so do prices

By: 
February 13, 2009

Prices of HDPE this week climbed in Asia. Higher prices of ethylene feedstock accompanied by strong gains in upstream naphtha together steered higher prices of HDPE across Asia, according to Polymerupdate. HDPE injection molding grades were offered at $950/mt CFR Far East Asia levels while HD film prices on a CFR South Asia basis were above $1000/mt levels.

With the holidays past, HDPE demand in China was active and this encouraged regional sellers to keep their pricing targets firm. HD film offers to China late last week were at $980/mt CFR levels, while film offers to India were at $1020-1030/mt CFR levels. One trader told Polymerupdate, “The regional markets are on fire and we expect this trend to continue through February. However, a planned start-up in the Middle East at the 300-kt/annum PetroRabigh HDPE facility next month will flood Asia with cargoes and this may help in cooling off the bullish regional trends. It’s therefore maybe prudent for the buying community to exercise caution ahead of March purchases.”

Meanwhile, LLDPE buying has remained active with the post-Lunar Holiday momentum in China seen particularly robust. CFR Far East Asia prices of LLDPE were assessed at $950/mt levels with CFR South Asia prices edging past $1000/mt levels. Strength in Asian naphtha prices coupled with high prices of ethylene feedstock supported sellers in their efforts to take their LLDPE prices higher. One LLDPE seller, contacted by Polymerupdate, said, “The pulse of the markets is upbeat and buyers are showing no signs of slowing down despite rising LLDPE prices. Our latest offers to India are at $1050/mt CFR levels."

An LLDPE buyer from India said, “We have heard that some business may have taken place at the $1050/mt CFR India levels, however we are skeptical in building inventories at these prices as additional supplies are expected next month from the Middle East. Petro Rabigh will start up its new 350,000-mt/annum LLDPE plant in March.” He continued, ”Another concern we have is a sudden slowdown in Chinese buying in the latter half of February as the agricultural season is over and LLDPE requirements for agricultural films will begin to wane. These factors could keep LLDPE prices from further rising and may even pressure prices a little lower.”

Prices for propylene remained bullish as demand remained robust across Asia. PP injection and PP raffia prices on a CFR Far East Asia basis were assessed at $860-870/mt levels with PP film prices at $900/mt CFR Far East Asia levels. In South Asia PP film price offers were pegged above $1000/mt CFR mark. Tight regional supplies supported suppliers’ strength in PP pricing, as did reports of hectic buying interest in China following that country’s holidays. In China, domestic PP prices were also seen firming in tandem with the spike in buying interest, while in India too domestic resin producers hiked their prices of PP. Traders contacted by Polymerupdate.com said they expect the higher prices to remain through February, however the trend may begin to show signs of tiring in March. Chinese converters are not running their plants at full rates owing to a slowdown in consumer demand for finished products. Plus, oncoming capacity, including from the 900-kt/annum Reliance PP plant at Jamnagar in India and the 700-kt/annum PetroRaigh PP plant in Saudi Arabia, will help ease the current supply pinch.

Polystyrene (PS) prices edged higher in Asia. Strength in SM feedstock prices prompted sellers to increase their offer rates. Supporting the price gains in PS were firm upstream prices of naphtha, ethylene and benzene values coupled with reports of improved buying trends in China, post the lunar holidays. GPPS prices on a CFR China basis were assessed up $40/mt from the week before at $790/mt levels. Offers to China were above the $800/mt CFR mark. GPPS prices on a CFR South East Asia basis were assessed up above $810/mt levels. HIPS prices hit $890/mt CFR China with offers heard at above $900/mt CFR levels. CFR South East Asia prices of HIPS were assessed at $910/mt CFR levels. 

On the PVC front, strength in upstream prices of ethylene, tight regional availability and reports of steady demand in PVC allowed sellers of EDC this week to up adjust their offer prices. Prices of EDC were assessed firmer at the $195/mt CFR levels with offers inching up to levels near the $250/mt CFR mark on Friday. Activity in China was yet to lift in earnest as several downstream operators continued to run their facilities at reduced rates.

Downstream, the pulse in Asian PVC markets was upbeat. Most players expected prices of PVC to rise through February, as supplies were tight and upstream ethylene, EDC and VCM costs bullish. To India, PVC offer prices were pegged at above the $750/mt CFR levels. Local PVC producers in India this week were seen hiking their offer rates in response to encouraging demand trends in the domestic markets. [email protected]

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