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- Domestic and import offers in the region were mostly on a downtrend during the quarter
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- Middle Eastern HDPE Film consistently decreased month over month
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- Maintenance shutdowns at several producers’ PE plants expected to provide support for prices
Southeast Asian domestic PE prices captured on a stable to softer trend in the first month of Q4 2019, SSESSMENTS.COM noted. During October, local PE offers in the Philippines market were mostly stable. Contrastingly, local and localized PE offers in Indonesia, Malaysia, Thailand, and Vietnam were mostly on a declining trend during the month. The same price trend captured in November. Moving to December, one of the local PE producers in Thailand initiated a price increase of THB1,000/ton ($33.5/ton) for HDPE Film, LDPE Film, and LLDPE Film C4 in the first week of the month. Likewise, an increase of between IDR10,000-200,000/ton ($0.7-14.3/ton) captured on local LLDPE Film C4 offers in Indonesia, as sellers were trying to stimulate buying sentiment. However, domestic offers in the region started to show a declining trend again by the second week of December, particularly in Indonesia and Vietnam market.
In the import market, offers continue to decrease month over month, especially for HDPE Film cargoes due to sluggish sales for this grade. On the week commencing October 21, import offers for HDPE Film and LLDPE Film C4 from a Saudi producer to Indonesia were down by $80/ton and $30/ton respectively compared to two months earlier. During the same week, November shipment offers for HDPE Film from Thailand to the Philippines emerged at $40/ton lower compared to October. Moving to November, import offers for HDPE Film of Middle East origin to Indonesia captured nearing $800/ton-threshold level on the week commencing November 18, catching up with US cargoes that have already available below the threshold level since early November. By the week commencing December 2, done deals for United Arab Emirates HDPE Film cargoes to Indonesia captured at $770/ton on LC at sight, CIF Indonesia Main Port basis since the producer the was having high inventory pressure, sources told SSESSMENTS.COM.
In general, demand for PE resins in the Southeast Asia market was sluggish during Q4 2019. The consistently slow sales for finished products were the major reasons behind the weak demand for PE resins in most countries within the region. Additionally, the continuous decline in PE prices in both local and import market had dampened buyers’ confidence to stock up materials. As informed to SSESSMENTS.COM, sales for HDPE Film were the lowest compared to LDPE Film and LLDPE Film C4 due to the ban on single-use plastic bags in several countries within the region. Approaching the year-end, buyers’ preference to keep lean inventory for financial reporting purposes also cited as one of the major reasons hampered demand for PE resins during the quarter.
On the supply side, no significant issues reported by market players in the region during the period as the overall demand remained weak. Due to weak demand and low prices, Indonesia’s Lotte Titan Nusantara decided to shut HDPE plant no.1 with a capacity of 125,000 tons/year on November 3. The plant was later resumed production on November 25, SSESSMENTS.COM noted. On the production sector, Malaysia’s Lotte Chemical Titan has planned to conduct turnaround maintenance at the whole complex in early March 2020 for around 25-45 days. The company operates three PE plants with a production capacity of 220,000 tons/year HDPE, 230,000 tons/year LDPE, and 115,000 tons/year HDPE, respectively. Likewise, Qatar Chemical Company II Ltd planned to conduct maintenance shutdown at the company’s HDPE plant with a capacity of 350,000 tons/year in January 2020, but the duration has yet to be confirmed. Additionally, Saudi Arabia’s Eastern Petrochemical Company (SHARQ) also planned to shut its HDPE and LLDPE line with a capacity of 400,000 tons/year each, starting from February 2020 for around 40-50 days.
Looking into Q1 2020, most players opined that demand would gradually improve after the Lunar New Year holiday. Likewise, PE prices are expected to rebound in line with the increases in China market by then. Several maintenance shutdowns at the regional producers as well as the Middle Eastern producers are expected to provide support for upward price adjustments, or at least keep prices firm during the quarter, as cited by SSESSMENTS.COM.
*Offers on LC at sight, EXW basis
*Offers on EXW basis
*Offers on EXW basis
