SINGAPORE--Linear low density polyethylene (LLDPE) cargoes of north American origin are coming into the Middle East from Chinese warehouses after a gap of more than two years, traders and end users in the Middle East said on Thursday.
However, there has been hardly any interest in these offers so far as bearish sentiment, ahead of the holy month of Ramadan in September, has blunted the appetite for imported cargoes, traders said.
"Some traders are trying to re-export from Chinese warehouses material they have shipped in from Canada and the US, due to lacklustre demand and falling prices in China," said a Dubai-based trader.
"The only deterrent is that no one wants to hold high stocks at this juncture, as we expect prices to fall next month," said a Sohar, Oman-based end user.
A second Dubai-based trader said he had been offered 1,000 tonnes of LLDPE of Canadian origin by a Chinese trader but had not expressed any interest as the peak manufacturing season for pre-Ramadan food packaging was already over.
The main impetus behind the re-export offers was the relative price stability in the Middle East in the past week, while prices in China had fallen by $40-80/tonne in the same period due to lean demand. Prices in the Middle East had earlier surged nearly 7% for August shipments on supply constraints.
Limited supply caused by outages at Saudi Basic Industries Corp (SABIC) s PE and PP plants at Al-Jubail, and reduced operating rates at Equate s PE plant in Shuaiba, Kuwait had led to the rise in prices, traders said.
Notional discussion levels for LLDPE in the Gulf Cooperation Council (GCC) market heard this week were up to $1,900/tonne CFR (cost and freight) GCC. But even at these levels, GCC prices were as much as $40/tonne above the discussion levels in China, making it viable for Chinese traders to re-export cargoes to the GCC.
Chinese traders were offering imported LLDPE at $1,750/tonne CFR China for prompt lifting at the bonded warehouses in China and based on these offers, re-exports offers were estimated at $1,770-1,780/tonne FOB (free on board) Shanghai, Chinese traders said.
Freight between China and the GCC was estimated at around $80/tonne, traders and end-users said.
LLDPE film grade prices were assessed at $1,890-1,950/tonne CFR (cost and freight) in the GCC and $1,720-1,800/tonne CFR China for the week ended 8 August, according to global market intelligence service, ICIS pricing.
However, there has been hardly any interest in these offers so far as bearish sentiment, ahead of the holy month of Ramadan in September, has blunted the appetite for imported cargoes, traders said.
"Some traders are trying to re-export from Chinese warehouses material they have shipped in from Canada and the US, due to lacklustre demand and falling prices in China," said a Dubai-based trader.
"The only deterrent is that no one wants to hold high stocks at this juncture, as we expect prices to fall next month," said a Sohar, Oman-based end user.
A second Dubai-based trader said he had been offered 1,000 tonnes of LLDPE of Canadian origin by a Chinese trader but had not expressed any interest as the peak manufacturing season for pre-Ramadan food packaging was already over.
The main impetus behind the re-export offers was the relative price stability in the Middle East in the past week, while prices in China had fallen by $40-80/tonne in the same period due to lean demand. Prices in the Middle East had earlier surged nearly 7% for August shipments on supply constraints.
Limited supply caused by outages at Saudi Basic Industries Corp (SABIC) s PE and PP plants at Al-Jubail, and reduced operating rates at Equate s PE plant in Shuaiba, Kuwait had led to the rise in prices, traders said.
Notional discussion levels for LLDPE in the Gulf Cooperation Council (GCC) market heard this week were up to $1,900/tonne CFR (cost and freight) GCC. But even at these levels, GCC prices were as much as $40/tonne above the discussion levels in China, making it viable for Chinese traders to re-export cargoes to the GCC.
Chinese traders were offering imported LLDPE at $1,750/tonne CFR China for prompt lifting at the bonded warehouses in China and based on these offers, re-exports offers were estimated at $1,770-1,780/tonne FOB (free on board) Shanghai, Chinese traders said.
Freight between China and the GCC was estimated at around $80/tonne, traders and end-users said.
LLDPE film grade prices were assessed at $1,890-1,950/tonne CFR (cost and freight) in the GCC and $1,720-1,800/tonne CFR China for the week ended 8 August, according to global market intelligence service, ICIS pricing.
