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China makes a firm return following the holiday

Number of visits: Date:2010-10-11 14:23


One day after the Chinese National Day holiday, most sellers in China elected to lift their

offer levels for PP, PVC, PE and PS, pointing to the higher energy and futures market


In the PP market, prior to the holiday, import and local offer levels were mostly stable.

Some of the domestic producers had lowered their prices by around CNY100-150/ton ($15-

22/ton) while the others stopped offering retroactive discounts in order to keep the market

sentiment firm before the holiday started.

Following the holiday, domestic producers returned to the market with increases of CNY100-

300/ton ($15-45/ton) while a distributor reported lifting their offer levels by CNY300-

400/ton ($45-60/ton). All these sellers point to the bullish market sentiment and the fact

that they are not under any sales pressure for their price hikes. They feel optimistic

about the market trend over the near term despite the currently sluggish trading activities

since most players are yet to return to their desks.

In the PVC market, before the Chinese National Day holiday, supply issues, stemming from

the ongoing electricity restrictions, pushed the local acetylene based PVC prices up by

CNY250-350/ton ($37-52/ton) while ethylene based PVC had gained CNY50-250/ton ($7-37/ton).

Now, after the holiday, some Chinese producers elected to issue initial post-holiday

increases of CNY50/ton ($7/ton) on both their acetylene and ethylene based PVC offers while

the others kept their offer levels at pre-holiday levels. These producers highlight that

they are not under inventory pressure and that they are mulling over lifting their prices

in line with the market trend in the upcoming days.

In the PE market, just before the holiday, overall buying interest had picked up as sellers

accelerated their purchases with the intention of building up some stocks since they

anticipated increases following the holiday period. Higher ethylene costs also influenced

this firming sentiment.

Now that the holiday is over, local sellers returned to the market with higher prices. A

domestic producer issued CNY200-500/ton ($30-75/ton) increases on their LDPE film prices,

CNY150-600/ton ($22-90/ton) hikes on their LLDPE film offers and CNY250/ton ($37/ton)

increases on their HDPE film prices. The producer puts forward the higher energy and

futures market prices as well as the limited LLDPE film supplies for their hikes.

Meanwhile, a distributor issued a CNY500/ton ($75/ton) increase on their locally held

offers for Chinese, Thai and Middle Eastern origins, citing the same reason.

In the PS market, ahead of the National Day holiday, offers had continued recording

increases on the back of the higher styrene costs while traders were reportedly building up

stocks as they were anticipating higher offer levels following the holiday.

To justify these expectations, a local PS producer issued CNY200-300/ton ($30-45/ton)

increases when they resumed their business after the holiday, pointing to the higher

production costs and bullish market sentiment. The seller, holding low stock levels, feels

confident that the PS prices will continue to increase over the near term. Meanwhile, a

distributor issued CNY300-400/ton ($45-60/ton) increases on their PS offers, on the back of

higher replacement costs as well as better demand.










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