Will imported PE shrug off the weakness?

Recently, the imported PE market fluctuates lower, and some traders offer lower to promote sales. The overall price adjustments have been modest. On Mar 18, prevailing offers for LLDPE (MFR: 2) were at $950-970/mt, LDPE (MFR: 2, with anti-blocking agent) offers at $1130-1150/mt, HDPE film at around $900-940/mt, load in Mar-Apr, CFR China main ports.

Looking ahead, the current imported PE market lacks clear direction in terms of supply and demand. Excluding supply and demand factors, the weak market trend is unlikely to reverse in the short term, and the sluggish performance is expected to persist.

From the perspective of the RMB market, the current performance is poor. On the supply side, despite the spring turnaround season, the reduction in supply due to maintenance is outweighed by the large number of new startups, resulting in significant supply pressure. On the demand side, apart from some seasonal demand for mulching film and agricultural greenhouses film), most downstream industries are in their off-season, leading to an overall oversupply situation and weak market sentiment. Additionally, LLDPE futures have been declining since late March, exerting noticeable pressure on the spot market. These factors collectively impact the imported PE market, particularly in terms of sentiment.

Regarding the exchange rate, although the CNY central parity rate has remained relatively stable, the spot selling rate of the Bank of China has shown significant appreciation. Against the backdrop of a weak RMB spot market and an appreciating exchange rate, most traders are unwilling to offer lower prices to balance the price difference between domestic and CFR China markets. For example, the current price spread for LLDPE is controlled at around 300yuan/mt, which is within a relatively healthy range. However, LDPE RMB market is obvious higher than CFR China price, and most traders kept their price firm. Nevertheless, downstream buyers are resistant to high-price offers, which has somewhat dampened market trading activity.

In addition, the CHINAPLAS International Rubber and Plastics Exhibition is set to take place in Shenzhen from April 15-18, 2025. As a major global event in the rubber and plastics industry, the exhibition will attract a large number of domestic and international suppliers, buyers, and industry experts. On-site negotiations are expected to increase significantly, especially with the concentrated participation of overseas suppliers, leading to more frequent interactions between supply and demand sides. The situation regarding new annual contract orders will also become clearer. Currently, the imported PE market is mostly in a wait-and-see stance, with some companies likely waiting to gather more market information and price guidance during the exhibition before making decisions. The exhibition will serve as an important benchmark for the industry, and market activity is expected to significantly increase during and after the event, with price trends and supply-demand dynamics likely becoming clearer.