Foreseeing a price shock in polymer market/The possibility of a decline in prices up to at least $100 per ton

Reported by “Petro-Analysis”, the price fall in poly ethylene and poly propylene market in China has been quite considerable in the preceding month.

Simultaneously, poly ethylene’s constant price decrease both in the local and future market of China has been followed by a decline in the price of the imported individual poly ethylene loads in the last week.

Market analysists expect the descending price rate will be continued due to the high stock/inventory of the mentioned products in the Chinese warehouses.

Nevertheless, poly ethylene’s descending rate and its linear trend demonstrate a vision in which poly ethylene’s price will fall in the future market of China; on the one hand, some people believe that the regular overall maintenance plans of some manufactories in the coming month may lead to a stability in the current prices, on the other hand, many producers have initiated supplying their products in the south-eastern markets of Asia because of the inappropriate conditions in the Chinese market.

This high supply leads to a fall in prices and makes them close to the market prices in China. In the coming weeks, if the Middle-east producers fail to sell their products which have been specifically produced for China, they will have to send a large proportion of these products to the south-eastern markets in Asia and this will result in another decline in prices in the region.

This is while poly propylene’s local market in China has also had a descending trend in the last month due to the disappointing amount of demands for the post new year holiday period and poly propylene’s high inventory in the local market. In addition to this, much pressure is imposed to the imported poly propylene because of this product’s price fall in Asia and future descending trend.

Although poly ethylene and poly propylene markets in China have currently reached a stable condition and the downstream demands have been stabilized, new importing prices are being equalized with the local market. Besides, America has requested China not to put the wastage import prohibition into practice. The wastage recycling organization of the USA has announced that this prohibition by China will ruin the American wastage industry which supports 155000 jobs as 5/6 billion wastage has been exported to China in 2016.

Although the Chinese deputy has accepted to study and analyze this request, it is also mentioned and noticed that each country is responsible for demolishing its wastage; and as China is committed to ruin its own wastage owing to its high population, it has no choice but to limit its wastage import.

Consequently, this issue strengthens the possibility of price declines in the Chinese market, and poly ethylene and poly propylene prices will probably drop approximately 100 to 200 dollars per ton.