That according to plastic pricing information supplier ChemOrbis, which reports that poor demand from buyers in China has spurred a number of global LLDPE sellers to divert their cargoes to other markets in hopes of achieving greater sales, while a number of traders inside China are offering their existing LLDPE stocks to other global markets in order to pare down their stock levels. One trader also told ChemOrbis he was offering Chinese LLDPE film to buyers in Southeast Asia in hopes of speeding up his sales.
According to data from ChemOrbis Price Index, spot LLDPE film prices on a CFR China basis have fallen $90-100/ton since the first week of May. Prices for high-density and low-density PE film grades have declined but less so, with HDPE film grades losing $40-60/ton over the same period and LDPE film grade prices falling by $60-70/ton. ChemOrbis' sources attributed the faster rate of decline in LLDPE film grade prices to weaker demand for this material as well as ample supply levels as producers with HDPE/LLDPE swing plants have been unable to immediately switch to producing HDPE even though production economics are currently more favorable for HDPE than for LLDPE.
Most of the import LLDPE film offers reported in Southeast Asia last week between May 30 - June 3 were for re-export cargoes from China, with several Southeast Asian producers telling ChemOrbis that they suspended their spot LLDPE film grade production for now due to unfavorable market conditions. A large Chinese trader offering Japanese and North American LLDPE film to the Southeast Asian market this week reported that it had lowered its offers for these cargoes by $80-100/ton on an FOB China basis. A large trader in Vietnam commented that an increasing volume of material from global producers is being redirected towards Southeast Asia due to poor demand inside China.
Re-export LLDPE offers from China have also begun to make their way to the Indian market; the same trader offering Japanese and North American LLDPE film to Southeast Asia is also offering these same products to the Indian market, while another Chinese trader reported that it is offering some Middle Eastern LLDPE film for re-export to the Indian market.