Southeast Asia PE Market Showed Poor Response Towards Price Adjustments
- Local and import offers shifted
- End-product demand not yet picking up
- Outlook depends on feedstock prices and market behaviour
Southeast Asia PE market’s responses remain unfavourable after prices adjusted. According to market participants, a Thai PE producer maintained local offers for PE across all grades stable until mid-week before deciding to trim HDPE Film and LLDPE Film C4 offers by THB750/ton ($23/ton) as compared to offers at the beginning of the week. Likewise, local offers for LDPE Film from the producer dropped by THB1,000/ton ($31/ton) as compared to the same period. SSESSMENTS.COM observed that this decision was taken following the weak buying sentiment where deals for HDPE Film were reached at THB500/ton ($15/ton) lower from the initial offers available in early this week. In Malaysia and the Philippines, local PE prices were kept stable from last week. Detailed information for Indonesia and Vietnam market is available in WeeklySSESSMENTS of the respective countries.
Moving to the import market, a Middle Eastern PE producer adjusted up August shipment offers for HDPE Film, LDPE Film, and LLDPE Film C4 between $20-30/ton citing limited allocation due to backlogs. SSESSMENTS.COM was told that Malaysian buyers’ acceptance level for the cargoes were at $10-80/ton lower depending on PE grades, hence, the latest offer level was deemed unworkable. Market acceptance seems matching with offers from the leading Indian petrochemical producer, which offered LLDPE Film C4 to Malaysia at $870/ton. From a Malaysian polyolefins producer, August shipment HDPE Film and LDPE Film offers to Philippines increased by $120/ton and $100/ton, respectively compared to deals for July shipment. Philippines’ converters receiving HDPE Film offers from the producer decided to skip procurement since the offer level at $950/ton is too high. All import offers on LC at sight, CIF Main Port basis.
Thai market players contacted by SSESSMENTS.COM revealed tight competition to reach deals in the PE market. For the end-products, demand for plastic packaging is ongoing, although it is not strong yet since the market is still in a recovery process. A different picture emerges from the Malaysia PE market, in which new import offers are not compelling enough to buyers as end-product demand remains flat. Supply remains tight in Malaysia due to shutdowns on local producers’ plants while Middle Eastern suppliers keep supply around 60-80% from normal allocation.
Speaking about the outlook, market players pointed out to SSESSMENTS.COM that demand will depend on two factors. Firstly, with PE prices are considered high at the moment, a price reduction is needed. This condition can occur if feedstocks price goes down coupled with negative dynamics in other markets like China and Vietnam. Secondly, the market needs to consider converters’ absorption on inventory impacted buying behaviour.
