NewsSSESSMENTS: Supply Tightness By Design Props Up Firm Import PE Prices In Malaysia

Firmness on import PE prices in the Malaysia market is caused by supply tightness, which according to market players, happen by design. A converter shared that ideal prices for import LDPE Film cargoes should be around $900/ton-level, while LLDPE Film C4 offers are expected to be hovering between $800-900/ton in the meantime. However, the converter’s acceptance level for import LDPE Film cargoes does not match with current offers available in the market. From SSESSMENTS.COM price list on July 16, Middle Eastern PE producers offering LDPE Film at $970/ton on LC at sight, CIF Malaysia Main Port basis. Such a level, according to the converter, can sustain because of several factors. Firstly, Middle Eastern PE producers are mostly running at a reduced rate of between 60-80% at the moment as an attempt to keep supply relatively tight in the market. Secondly, delay in shipment of Iranian PE cargoes is also affecting supply in the market.

As SSESSMENTS.COM quoted, converters thought that Middle Eastern producers will continue to guard their supply in the market as the demand still falls below normal despite some improvements seen in Malaysian businesses. The end-products demand is still quite slow at the moment, which is undoubtedly not supporting firm import prices this week. Regarding local producers, the converter expected Malaysia's Pengerang Refining and Petrochemicals (PRefChem) to start production at its polymer units in October after postponing start-up in Q3. The converter also shared market talks saying that there is a leftover portion of PRefChem cargoes which might be offered to the export market. In terms of outlook, converter expects the current firm import PE prices will be short-lived with supply being relaxed around August-September following the arrival of US PE cargoes previously booked in April.

Tags: Asia Pacific,English,Iran,Malaysia,Middle East,News,PE,SEA,US