Southeast Asia PE Market Showed Tedious Movement
- Local PE offers moved in a similar trend
- No significant improvement recorded in terms of demand
- PE prices predicted to increase further, yet might receive cold responses
Market sources informed SSESSMENTS.COM that the Southeast Asia PE market showed tedious movement. In Thailand, the offers local HDPE Film and LLDPE Film C4 cargoes from a local producer increased by THB1,000/ton ($32/ton) while for LDPE Film cargoes, the producer’s offers were captured stable to firmer by THB1,000/ton ($32/ton). All as compared to last week. Sources stated that the upward adjustment was supported by the limited supply from the producer’s end as well as firm monomer price. Despite the increment, some traders were still selling local HDPE Film and LLDPE Film C4 cargoes at the same level as last week’s offers as they still have cargoes previously bought at lower costs. Likewise, the leading Philippines polyolefins producer also applied an upward adjustment of PHP1,000/ton ($20/ton) from last week for HDPE Blow Moulding, HDPE Film, and LLDPE Film C4 grades. Meanwhile in Malaysia, the offers for local PE cargoes across all grades are still available between MYR3,580-4,250/ton ($837-994/ton) on cash or 30 days credit term, FD Malaysia basis, and excluding 6% SST. Detailed information for Indonesia and Vietnam market available in the WeeklySSESSMENTS of respective countries.
From the import market, July shipment offers for LLDPE Film C4 from a Saudi producer to Malaysia stood at $830/ton, which is $80/ton higher from last month. Sources revealed to SSESSMENTS.COM that the buyers were submitting bids at $40/ton lower from the initial offer level. However, the producer responded that the bid level is too low and asked whether offers at $800/ton will be acceptable. As such, buyers resubmitted bids at $800/ton, yet no response from the producer so far. All offers on LC at sight, CIF Malaysia Main Port basis. While to the Philippines market, the offers for import mLLDPE C6 cargoes of Singapore origin captured at $40/ton higher compared to offers at the end of May. Sources added that the offers were kept at above $1,000/ton-level citing the limited supply as well as firm monomer prices. Nevertheless, the offers were deemed too high and no deals concluded yet.
According to sources reported to SSESSMENTS.COM, there is no significant improvement in PE demand observed in the Southeast Asia market. In Thailand, slow demand is affected by the slow sales for finished products as healthy demand is only recorded from the food packaging sector. As such, buyers are keeping the procurement on a hand-to-mouth basis due to the high prices as well, while some others already have sufficient inventory on hand. Sources added that the market situation in Malaysia is also not much different; sales for finished products remain slow. Whereas in the Philippines, the main factor hindering trading activities is the lack of workforce stemming from limited public transportation as the number of confirmed COVID-19 cases remains high. Supply-wise, the availability of PE cargoes in Southeast Asia market is generally limited, especially for local materials.
Pertaining to the outlook, Southeast Asian market players opined to SSESSMENTS.COM that there is a possibility for local PE prices to increase further. July delivery offers from a Malaysian expected to be announced next week with an upward adjustment of MYR200/ton ($47/ton). However, buyers will most likely show resistance towards the offers as actual demand for finished products remains slow, as such, the demand possibly would slow down once the replenishment activity is finished. Moreover, in the Philippines, the government is less likely to loosen the restrictions for public transportation as the number of Coronavirus cases remains high.
