Players in China report that PE sellers have opened the new year with price increase attempts, arguing that prices should be near the bottom given the prolonged downward trend and firm spot ethylene costs. Buyers remain skeptical, however, countering that 2016 is likely to see another year of slower than expected consumption growth while adding that ongoing additions of new coal based PE plants will keep supply levels sufficient to cover demand.
“Prices are up around $20/ton for import cargoes and around CNY100-200/ton ($15-31/ton) for domestic materials. We attribute these hikes to the fact that Sinopec and CNPC are said to be holding low stock levels. Although most sellers are firm on their prices for now, we have not seen any major up-tick in trading activity and we believe that demand will drop off towards the end of the month as players begin to leave their desks for the Chinese New Year holidays,” a trader reported.