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Dollar strength keeps a floor under local PE, PP prices in SE Asia

by Shibu Itty Kuttickal - sikuttickal@chemorbis.com
  • 30/04/2024 (01:58)
A strengthening of the US dollar over the past month against Southeast Asian currencies has underpinned local prices of polyolefins in the region somewhat. But the persistent lack of buying support has kept thwarting seller efforts to talk up levels on the grounds of local currency depreciation.

Currency charts show US dollar values strengthening by 2-3% over the last month against Indonesian rupiah, Malaysian ringgit, Philippine peso, Thai baht, and Vietnamese dong, while it rose by slightly less than 1% against the Singapore dollar.

Indonesian local prices rebound from 3-month low

Indonesian domestic prices of PP and PE, which fell by about 8-10% in the five weeks till mid-April, have since bottomed out and rebounded from around three-month lows. Local prices for LLDPE film, HDPE film, and homo-PP raffia have climbed about 4% in the last two weeks, according to ChemOrbis Price Index data.

A major Indonesian producer has raised its homo-PP raffia and injection, and PE film offers by about 4% over the past two weeks.

Vietnamese PP, PE prices show divergent trend

In the Vietnamese local markets early in the current week, ChemOrbis Price Wizard shows PP raffia and inj. prices higher by about 3% from the corresponding week of the previous month. PE markets though were either staying rangebound to lower, as demand concerns weighed on buying decisions.

“Currently the market is very quiet because of the Liberation Day and Labour Day holidays ahead in Vietnam. HDPE and LLDPE prices are mostly stable but tight supply and higher import prices because of the dollar strength has kept LDPE firm. We feel inventories have fallen and people may need to replenish stocks soon. And they’re worried that prices will rise because of the strength in the crude oil market,” a trader in Vietnam said.

Thai PP, PE prices keep rising

In the Thai local markets, local prices of LDPE and HDPE film were noted to have risen by about 2% since end-March, while LLDPE film and PPH raffia prices have climbed by about 1%.

“Both PP and PE prices have been rising because of the depreciation in the baht against the US dollar but the prices can be negotiable if trading volumes are high,” a local trader said.

Minimal uptakes, deadlock in Malaysian markets

At the same time, Malaysian prices of most PP and PE grades were mostly stable to lower by just about 1% over the past one month, as uptakes by traders and converters were minimal or only for immediate requirements.

While attempts were made to raise prices, attributing it to the strength in the US dollar against the ringgit, there were few takers at the higher levels, traders said. “The markets are apparently at a deadlock between buyers and sellers lately. While producers still struggle with high costs and import prices have risen because of the dollar strength, weak demand leaves no room for higher polyolefin prices,” a Malaysian trader said.

Peso’s slide keeps a floor under Philippine prices

In the Philippines, demand concerns continued to keep prices under pressure, although the peso’s slide meant local prices could not fall beyond a certain floor. Over the past month, local LLDPE and HDPE film prices in the country have been largely unchanged, however they witnessed decreases of about 2% in dollar terms over the same period, shows ChemOrbis Price Wizard.

“There has been some restocking by local converters lately. Domestic demand has stayed flat for many weeks, given the slow downstream purchases, but manufacturing operating rates have ramped up slightly in recent weeks. Still, converters stay cautious and may restock only small volumes on a need-to basis,” a converter commented.
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