China, SE Asia PE outlook for Q1 2023: Demand uncertainty to prevail amid Covid, economic woes
by Merve Sezgün - msezgun@chemorbis.com

China and Southeast Asia’s import PE markets have staged a cautious rebound from more than two-year lows in the final month of 2022, supported by limited import availability and ongoing supply cutbacks. China’s zero-Covid exit provided a further boost to sentiment and led to pre-holiday replenishments as the month wore on.
A quick summary for 2022: PE trended down for most of year
2022 has been a challenging year for the Asian PE markets as prices trended lower for eight consecutive months from March to November, if a short-lived rebound in September is disregarded.
Average price data from ChemOrbis Price Index reveal that CIF China LDPE, LLDPE, and HDPE film prices reached their 2022 highs in March, respectively at $1560/ton, $1330/ton, and $1260/ton. The three lost 37%, 32%, and 30% of their value until the latest rebound staged in December.
The year’s lowest weekly price averages were recorded in mid-November at $985/ton for LDPE film, $905/ton for LLDPE film, and $890/ton for HDPE film.

ChemOrbis data also show that CIF Southeast Asia PE prices reached their 2022 highs in March at $1765/ton for LDPE film, at $1440/ton for LLDPE film, and at $1425/ton for HDPE film. The markets were down 41% for LDPE and 34% for LLDPE and HDPE film when they hit 2022 lows in December.
Will December rebound be sustained?
Asian PE markets have so far managed to hold on to their higher levels after recovering from more than two-year lows in early December. Supply limitations, both import and domestic, have boosted sellers’ firm stance and buyers’ appetite for some pre-holiday purchases.
However, the optimism generated by China’s abrupt zero-case exit has proven short-lived, as the major shift in its Covid policy has triggered a fresh wave of infections across the country.
There is now growing concern over the rapid spread of the virus with the Lunar New Year holidays round the corner. It is already being reported that the surge in cases has started to deplete the workforce in many factories.
That is to say, the January PE outlook is dominated by the fresh Covid wave sweeping China’s major cities and a great deal of uncertainty that comes with it. Even though the government has stepped up to boost consumer spending to help the economy heal, the level of market activity will mostly depend on how China will handle the new Covid wave.
In the case of an uncontrollable spread, operations at both end-product factories and PE plants would be interrupted, leading to a prolonged stagnancy across Asian polymer markets.
A solid demand recovery unlikely for Q1
Players in China and Southeast Asia are not hoping to see a meaningful recovery in export demand for finished products in the face of the gloomy economic outlook for 2023, as high inflation and rising interest rates are here to stay to crimp consumption across the globe.
China’s incentives to boost consumer spending would be a game changer in terms of its local demand, but again, it will depend on how quickly the country gets the outbreak under control. According to authorities, China may still have a long way to go to return to a pre-pandemic normal.
On the other hand, supply cutbacks are expected to prevent major price falls, as PE producers will likely continue to keep run rates low throughout the first quarter or even the second, in order to offset the impact of the approaching start-ups of new plants in China and the weak stance of demand across all Asian markets.
Check out ChemOrbis Price Forecast Reports, which are designed to cover everything you need to get an idea of where the PE markets are headed in the upcoming months. Click the image below to request a sample.
Nevertheless, the rapid spread of the virus in China has raised doubts about the sustainability of the current trend, pushing buyers back to the sidelines. “The growing uncertainty over China’s Covid battle could pull down prices. We must be super cautious when making fresh purchases as we continue to face a slump in export orders for finished goods from our Western customers amid slowing economies,” explained a converter based in Vietnam.
A quick summary for 2022: PE trended down for most of year
2022 has been a challenging year for the Asian PE markets as prices trended lower for eight consecutive months from March to November, if a short-lived rebound in September is disregarded.
Average price data from ChemOrbis Price Index reveal that CIF China LDPE, LLDPE, and HDPE film prices reached their 2022 highs in March, respectively at $1560/ton, $1330/ton, and $1260/ton. The three lost 37%, 32%, and 30% of their value until the latest rebound staged in December.
The year’s lowest weekly price averages were recorded in mid-November at $985/ton for LDPE film, $905/ton for LLDPE film, and $890/ton for HDPE film.

ChemOrbis data also show that CIF Southeast Asia PE prices reached their 2022 highs in March at $1765/ton for LDPE film, at $1440/ton for LLDPE film, and at $1425/ton for HDPE film. The markets were down 41% for LDPE and 34% for LLDPE and HDPE film when they hit 2022 lows in December.
Will December rebound be sustained?
Asian PE markets have so far managed to hold on to their higher levels after recovering from more than two-year lows in early December. Supply limitations, both import and domestic, have boosted sellers’ firm stance and buyers’ appetite for some pre-holiday purchases.
However, the optimism generated by China’s abrupt zero-case exit has proven short-lived, as the major shift in its Covid policy has triggered a fresh wave of infections across the country.
There is now growing concern over the rapid spread of the virus with the Lunar New Year holidays round the corner. It is already being reported that the surge in cases has started to deplete the workforce in many factories.
That is to say, the January PE outlook is dominated by the fresh Covid wave sweeping China’s major cities and a great deal of uncertainty that comes with it. Even though the government has stepped up to boost consumer spending to help the economy heal, the level of market activity will mostly depend on how China will handle the new Covid wave.
In the case of an uncontrollable spread, operations at both end-product factories and PE plants would be interrupted, leading to a prolonged stagnancy across Asian polymer markets.
A solid demand recovery unlikely for Q1
Players in China and Southeast Asia are not hoping to see a meaningful recovery in export demand for finished products in the face of the gloomy economic outlook for 2023, as high inflation and rising interest rates are here to stay to crimp consumption across the globe.
China’s incentives to boost consumer spending would be a game changer in terms of its local demand, but again, it will depend on how quickly the country gets the outbreak under control. According to authorities, China may still have a long way to go to return to a pre-pandemic normal.
On the other hand, supply cutbacks are expected to prevent major price falls, as PE producers will likely continue to keep run rates low throughout the first quarter or even the second, in order to offset the impact of the approaching start-ups of new plants in China and the weak stance of demand across all Asian markets.
Check out ChemOrbis Price Forecast Reports, which are designed to cover everything you need to get an idea of where the PE markets are headed in the upcoming months. Click the image below to request a sample.
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