Import of American low-pressure polyethylene (HDPE) and linear polyethylene (LDPE) to China will be disrupted after the introduction of duties by both countries since August 23, ICIS reports.

Chinese buyers who have already ordered material from the US may have to re-export cargo at lower prices from other regions.

Two countries have announced the implementation of the duties on hundreds of goods, including chemical products, since August 23. According to sources in the market, the import prices of HDPE and LDL can grow in China.

Several importers said domestic buyers can only choose to re-export or pay fines to avoid losses for undelivered US materials.

In order to be able to re-export the material, some traders will have to cancel the original contract on the terms of the letter of credit and replace it with a new one that allows such re-export.

Some industry sources said that a huge amount of re-export could lead to a sharp drop in purchases in foreign markets.

Moreover, given the ongoing trade war with China, the US may not receive attractive offers from buyers from other regions.

Domestic distributors in China were basically ready to cancel the contract to avoid further losses, but some US suppliers added a clause in the contract so that those buyers could not easily get rid of their obligations.

According to ICIS, on August 8, prices of American injection molding HDPE were in the range of USD1-100-1,140 per tonne, CFR, and LDL prices were around USD1090-1100 per tonne.

Import duties for American PE will exceed 30% after their introduction, which means that the cost of US PE will increase by more than CNY2,000 per ton.

The share of US imported polyethylene in total imports of China is – LDPE – 5.1%, HDPE – 9.1%, LDL – 1.1%.

Earlier it was reported that American ethylene would be subject to 25% of duties in China as part of the response to similar duties, which will be introduced by the US on August 23 to the amount of USD16 billion. At the same time, according to the source, additional costs will not impede the import of ethylene due to the low price American material.

According to the survey of ScanPlast of the company MRC, in Russia, based on the results of the first six months of this year, the estimated PE consumption amounted to 994.4 thousand tons, which is 10% more than the same indicator a year ago. The supplies for all types of polyethylene have grown.