As a result, HDPE-film prices have dipped $5/mt since last Wednesday, when it was assessed at $1,265/mt CFR Far East Asia. It was assessed at $1,260/mt CFR Far East Asia Tuesday.
In contrast, LLDPE gained $10/mt since last Wednesday to end at $1,325/mt CFR Far East Asia Tuesday, while LDPE was up $5/mt from Wednesday to $1,580/mt CFR Far East Asia Tuesday.
PE end-users said the seasonal demand is over. Demand for PE resins, especially HDPE-film, is generally high around September, when plastic converters prepare for the strong demand for finished products to be exported to Western markets before Christmas.
A China-based trader noted that the demand for HDPE-film is particularly weak at the moment.
"There appears to be a lot of cargoes in the warehouses," said the trader. "Right now, the market is not driven by fundamentals, but by speculation."
Another producer pointed that supply for HDPE is long at the moment, compared with LDPE and LLDPE.
LDPE supply is tight around the world and several market participants report being unable to secure LDPE cargoes due to the lack of allocations.
LLDPE demand is fairing better as the resins are used in agricultural film which is in higher demand now due to the colder weather in China. Farmers use the film to protect their crops during the winter months.
More LLDPE is also used to blend with LDPE, which is facing an extremely tight supply situation around the world right now, said some sources.
"Converters are blending in more LLDPE as LDPE prices are very high," said one trader.
Looking ahead, end-users have adopted a cautious stance. They feel that the market has been driven by speculative trading. They say they are unlikely to make large quantity purchases right now and are drawing on their inventory.
"We have about two months worth of inventory, so we are only buying in small quantities right now," said a plastic bag producer. "We will probably need to buy only after January."
A South Korean trader said, "Traders are still buying, in anticipation that prices will go up further."
