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Domestic prices of LDPE in China have been falling over the past two weeks

May 10/2011

(ICIS) -- Domestic prices of low density polyethylene (LDPE) in China have been falling over the past two weeks amid a softening of demand, as downstream players face difficulty in accessing credit, industry sources said on Monday. Continued monetary tightening in China - through hikes in policy rates and in banks reserve requirement ratio makes the cost of capital prohibitively high for small to medium companies, they said.

Offers for LDPE films are quoted at yuan (CNY) 13.400-13.700/tonne (USD 2.062-2.108/tonne) on Monday morning. Over the past eight trading sessions, LDPE film prices in east China shed yuan (CNY) 50-100/tonne to CNY13.400-13.800/tonne ex-works (EXW) on 6 May, as assessed by Chemease, an ICIS service in China.

Meanwhile, seasonal factors are also at play in the weakening of demand from a major end-user the agricultural sector, market sources said.

LDPE is used in packaging of grains. But the summer months of June, July and August are typically the lull season for the sector after the spring planting season, they said.

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