The marketing arm of a Middle Eastern PE producer contacted by SSESSMENTS.COM stated that the uptrend in the China market has propped up Southeast Asia prices and impedes from falling. However, the marketing arm is unsure about the sustainability considering the current buying sentiment. This week, the latest offers for import LLDPE Film C4 cargoes dipped by $20/ton on a weekly comparison, with bids captured at $20-40/ton lower than the initial offer levels. So far, deals have not been confirmed yet since the supplier needs to monitor the China market further. Especially when the China market is on an uptrend as of recent, which at least should stop the prices in Southeast Asia from declining further. Yet, if the China market is on a downtrend, the supplier will most likely accept the bids for LLDPE Film C4 cargoes.
For HDPE Film, the import offers raised between $10-30/ton considering last week’s offers that were deemed too low. Currently available at $760/ton on LC at sight, CIF China Main Port basis. Meanwhile, for HDPE Blow Moulding and LDPE grades, the import offers remained stable from last week. All offers are for May shipment. “There might be some adjustment later depending on the movement in the China market. But for now, we will likely keep the offers at the current level,” the marketing arm further explained to SSESSMENTS.COM.
Overall, SSESSMENTS.COM was told that demand in Indonesia and Malaysia market has yet to show any improvement this week. Some customers only submitted bids in order to maintain the long-term relationship with the supplier and most only buying on a small volume. By grade comparison, demand for HDPE Blow Moulding is the strongest at the moment. Particularly in Malaysia, most factories are still running at 40-50%. However, as of April 15, the Malaysian government announced that they have revised the maximum production capacity to 70% and permit more industries to resume productions. To get approval, converters need to meet requirements from the government as a set of measures to curb the Coronavirus transmission.
Considering the slow demand, it is rather hard for PE prices in Southeast Asia to follow the uptrend in the China market. The marketing arm opined to SSESSMENTS.COM that Southeast Asia market would remain sluggish onward.
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