Market sources contacted by SSESSMENTS.COM cited that a considerable number of inquiries still flooded although the Middle Eastern PE producer has sold-out July allocations as buyers are expecting additional volume. Last week, the sources informed that a Middle Eastern PE producer has sold out all allocation for July shipment to the Malaysia market. Owing to the tight supply in Malaysia, last week, the producer managed to achieve deals at a higher level compared to deals closed two weeks ago; in which HDPE Film at $30/ton higher, LDPE Film at $20/ton higher, and LLDPE Film C4 at $10/ton higher.
Even though the producer is no longer offering materials, lots of customers are still inquiring this week. Taking into account the low availability of PE materials in the Malaysia market, buyers hope that the producer will give at least 30% of additional volume. However, buyers’ wish may not be granted since the producer is still busy arranging the delivery for pending orders, as sources told to SSESSMENTS.COM.
Speaking of the Malaysia market, the sources revealed to SSESSMENTS.COM that one of the reasons behind the strong demand for import materials is because of the tight supply in local producers’ end. Aside from that, the business sector in the country has improved significantly as of recent; most converters are running production at around 75% from the normal capacity and targeting to hit 100% in the near term. In short, supply in the Malaysia market is unable to offset the improving demand.
On the other side, most Middle Eastern producers also claimed to have short supply since their plants are running at a reduced rate. The producers are forced to cut the workforce in their factories due to physical distancing rules; resulting in a drop of output. In the days to come, the sources opined to SSESSMENTS.COM that import PE prices will continue to move higher in the near term as supported by the tight supply and expectation of improving demand week over week.
