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December PE offers to SE Asia imply further drops, yet to respond to China

by Pınar Polat - ppolat@chemorbis.com
  • 24/11/2022 (12:35)
Both regional and overseas producers have started to reveal their PE offers for December to Southeast Asia as of this week mostly with decreases, citing slow demand across the regional markets.

In the neighboring China market, on the other hand, import PE prices have mostly followed a stable to slightly firmer trend after the sentiment cautiously improved over the last week.

December PE offers post up to $90/ton monthly decreases in SE Asia

A Southeast Asian producer cut December PE offers to Indonesia by $20-30/ton for HDPE grades and $80/ton for LDPE grades. The producer’s December PE offers were standing at $1220/ton for LDPE film, $1320/ton for LDPE coating, $1120/ton for HDPE film, and $1150/ton for HDPE blow molding, all on CIF Indonesia, cash basis.

A Vietnamese trader reported that a Saudi producer’s December PE offers to Vietnam were also $90/ton lower from last month at $940/ton for HDPE and $960-970/ton for LLDPE film on CIF Vietnam, cash basis. “We are waiting for the market feedback, but we are aware of that demand is not strong.”

Weekly offers to SE Asia are down, too

Not only monthly announcements, weekly price levels offered to the regional markets were also either stable or lower this week. A Middle Eastern producer elected to keep its HDPE and LLDPE film offers, which see better demand, stable at $960/ton CIF SEA, cash basis, with a $10/ton discount option on deals. As for LDPE film, offers were $10-20/ton lower on the week at $1070-1080/ton on similar terms.

“We expect demand to weaken further next month, as buyers will refrain from new purchases amid the year-end. However, there may be some replenishment in January, as buyers will be returning to the markets before the Chinese New Year holiday,” a company source commented. In 2023, the biggest holiday in China, the Lunar New Year, falls on January 22nd.

Import PE prices regain strength in China despite all the caution

After stabilizing over the past week, Middle East origin PE prices on CIF China, cash basis have managed to move north this week.

During the week that ended on November 11, LDPE film prices broke below the $1000/ton mark while HDPE and LLDPE film prices below the $900/ton mark were also reported. Within two weeks, prices above these levels reappeared in the markets.

CIF China LDPE prices above $1000 mark re-appear

As a Chinese trader put it, “The recent increase of import PE is due to the appreciation of yuan against USD and, also the cautiously firmer sentiment in the domestic market.

Supply pressure at home is low as there are some plants having turnarounds and plants being operated at reduced rates. But for demand, there is resistance following the price hike as we are now in the off-season.”

Import PE prices for Middle East origin LDPE and LLDPE film prices have been stable to $30/ton higher from last week so far to be assessed at $980-1030/ton and $890-930/ton CIF China, cash, respectively. HDPE film prices of the same origin have also been stable to $10/ton higher at $890-920/ton with similar terms.
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