US Polyethylene Enters Asian Market

Recently, the Ministry of Commerce and Industry of India initiated an anti-circumvention investigation into the anti-dumping case concerning CPVC originating from or imported from China and South Korea. The Ministry announced that, in response to applications submitted by Indian domestic companies DCW Limited, Epigral Limited, and Lubrizol Advanced Materials India Private Limited, it would launch an anti-circumvention investigation regarding chlorinated polyvinyl chloride (CPVC), whether or not further processed into compound, originating from or imported from China and South Korea. The investigation will examine whether Chinese products involved are being exported to India through Malaysian exporter Sasia Chlorine Polymers Sdn. Bhd., Japanese exporter EBC Corporation, and Thai exporter Sekisui Specialty Chemicals (Thailand) Co., Ltd., in order to circumvent existing anti-dumping duties. This investigation is limited to the products exported by the aforementioned three exporters from these three countries.

In mid-September, U.S. polyethylene (PE) spot export prices rose significantly as concentrated purchasing by Asian buyers opened up cross-regional arbitrage opportunities. According to assessments by Platts, part of S&P Global Commodity Insights, the Houston price for U.S. high-density polyethylene (HDPE) blow-molding grade reached $1,135 per metric ton on September 14, an increase of $110 from September 1. Linear low-density polyethylene (LLDPE) and low-density polyethylene (LDPE) prices rose by $66 and $33 per metric ton, respectively. However, the core driver of this price surge was not changes in domestic U.S. supply and demand, but rather a shift in global trade flows. Market participants believe that while the recent rise in U.S. PE export prices is a short-term signal amid supply disruptions, it still presents a valuable opportunity for the U.S. PE industry to penetrate the Asian market.

CNOOC and Shell Petrochemicals Company Limited(CNOOC and Shell Petrochemicals, CSPC)Production at its polyethylene (PE) facilities has been suspended.CNOOC and Shell’s joint venture, located in the Daya Bay Petrochemical Zone in Huizhou, Guangdong, is a major polyethylene production base in China. Its HDPE and LLDPE products are widely supplied to downstream plastic markets in South China and across the country. The current shutdown of its PE unit will directly affect the domestic spot supply of polyethylene, with the market closely monitoring the reasons for the outage, the maintenance schedule, and the expected restart date.

On September 10, LG Chem and TK Chemical, a subsidiary of SM Group, signed a memorandum of understanding (MOU) on the development of eco-friendly biodegradable materials (PBAT) and business cooperation at the LG Twin Towers in Yeouido, Seoul. The two companies plan to sign a formal contract within the year and aim to construct a PBAT production line and commence product manufacturing in South Korea in the second half of 2022. Specific details such as production capacity are undisclosed per the agreement. TK Chemical plans to build the PBAT production line leveraging its stable operational capabilities in PET polyester facilities.

ExxonMobil’s offers for China’s main ports rose this week: the mainstream duty-free Singapore-origin metallocene grade was quoted at $1,395 per ton for September shipment. Actual transactions are subject to firm deals.