Southeast Asian Market Players Expect Downward Adjustments On Upcoming Import PE Offers
- A Malaysian polyolefins producer adjusted August delivery offers
- PE demand in the region is generally sluggish
- Southeast Asian market players expecting lower prices
As informed to SSESSMENTS.COM, Southeast Asian market players are expecting downward adjustments on upcoming import PE offers. In the domestic, offers for local PE cargoes across all grades in Thailand were kept stable from last week. Likewise, local HDPE Film and LLDPE Film C4 offers from the leading Philippines polyolefins producer were also recorded stable on a weekly comparison. However, sources mentioned that the producer is unable to provide prompt delivery cargoes as there are still a lot of backlogs needed to be cleared. Meanwhile, in Malaysia, a polyolefins producer announced August delivery offers with an upward adjustment of MYR60-220/ton ($14-52/ton) for HDPE Film and MYR180/ton ($42/ton) for LDPE Film. While for LLDPE Film C4 cargoes, August delivery offers from the producer were recorded stable. Adjustment for August delivery is compared to Juli delivery offers.
From the import market, a Middle Eastern producer decided to adjust import LDPE Film offers between $10-20/ton lower, LLDPE Film C4 offers between $30-40/ton lower and keeping a stable offer level for HDPE Film. Adjustments were on the biweekly comparison. Pertaining to the market response, HDPE Film offers were deemed too high and most buyers submitted bids at $60/ton lower than the initial offer level at $880-890/ton. As such, the producer was having difficulties to conclude deals for this grade. For LDPE Film, the Middle Eastern producer was offering LDPE Film with high quality, hence, the offers were deemed workable and deals managed to be concluded at the initial offer level. As for LLDPE Film C4, deals were concluded at initial offer level to slightly lower by $5/ton from the initial level. From another Middle Eastern producer, SSESSMENTS.COM was told that the offers for import HDPE Film and LLDPE Film C4 to Thailand market were higher by $70/ton and $30/ton respectively compared to last month. However, the offers were deemed too high considering the weak buying sentiment in Thailand. Additionally, August shipment offers for Saudi LLDPE Film C4 to Malaysia market increased by $40/ton on a monthly comparison, standing at $870/ton. Following the adjustment, a Malaysian converter submitted bids at $840/ton citing that the company managed to conclude deals for Qatari LLDPE Film C4 cargoes at such a level. Further added, deals for import Qatari LLDPE Film C4 cargoes were concluded at $840/ton, which is $40/ton lower from the initial level.
In general, PE demand in Southeast Asia is sluggish. As reported to SSESSMENTS.COM, most players opted the wait-and-see stance and are expecting lower prices as the current levels are too high. Further explained, demand in Thailand is weak due to the rainy season, hence, buyers are keeping the inventory level as low as possible. In the Philippines, finished product sales are slowing down as buyers are being careful about their spending which led to softening demand for PE resins. However, Philippines buyers noted that import materials are currently more attractive compared to local materials as the local producer in the country is unable to provide prompt delivery while the currency exchange rate is strengthening. On the production side, most Philippines converters are still running the production at 50% from the normal rate stemming from the lack of manpower and transportation issues. While in Malaysia, businesses are still reportedly slow due to the growing concern regarding the market outlook. On the supply side, tightness is reported from Malaysia especially for LLDPE Film C4 grades.
Looking ahead, the majority of Southeast Asian market players are expecting import PE prices to move lower taking into account the stagnant demand as well as the re-escalating US-China tension. Meanwhile, some players prefer to continue monitoring the market development amid unclear outlook for demand and pricing, SSESSMENTS.COM was told.
