China LLDPE extends price rout due to weak demand

Prices for linear low-density polyethylene (LLDPE) film in China have continued their rout, hitting a low not seen since early 2003, largely because of extremely weak downstream demand.

Argus assessed LLDPE film prices at $640-680/t cfr today, down by $30-50/t from the previous week and the lowest since 30 January 2003.

Earlier this week, China announced a rebound in the country's manufacturing PMI to 52 in March, up from a record low of 35.7 in February. But this is not necessarily translating into strong demand for LLDPE resins, as downstream convertors continue to adopt bearish positions.

The May delivery LLDPE contract settled at Yn5,370/t on 30 March, down by 5.4pc, or Yn315/t, from the previous session and the lowest level since 2004.

Buyers in China are expecting further price declines of LLDPE film resins and do not expect a bottom to be reached anytime soon.

Declines in feedstock propylene values this week further weighed on sentiment among already cautious buyers.

Polymer inventories at key producers Sinopec and PetroChina rose slightly to 1.135mn t today, up from 1.125mn t a week earlier.

By Muhamad Fadhil