Firming in HDPE lags behind LLDPE, LDPE on plastic bag ban in SE Asia
Sellers regain confidence on scheduled turnarounds
PE sellers have approached the Southeast Asian market with increases since last week pointing to reduced availability amid scheduled turnarounds. Apart from those in the Middle East, a number of shutdowns are also planned in Southeast Asia.
These include PTTGC’s ongoing maintenance shutdown at its LLDPE line. The company also plans another maintenance shutdown at its HDPE line from January 23. In the Philippines, JG Summit’s HDPE/LLDPE swing plant is also undergoing maintenance while Lotte Titan Nusantara’s HDPE and LLDPE units in Indonesia are down for commercial reasons.
Supply concerns boost HDPE prices only to some extent
Import LDPE and LLDPE film offers on CIF SEA basis increased around $10-20/ton last week while HDPE was mostly stable or logged relatively smaller gains.
“Sellers try to increase prices because of limited supply and offers. But demand for LLDPE and LDPE is better than for HDPE,” a source at a Middle Eastern producer said. “Players worry that HDPE prices may resume their weakness over the medium term because of high supply from the US and lower demand amid a ban on single-use HDPE bags,” he added.
Plastic bag bans loom large on targeted gains
As more countries in the region are looking at restricting single-use plastic bags, players are now wondering whether there will be sufficient demand for HDPE to digest the targeted gains.
HDPE is commonly used for thin plastic bags to carry shopping items and groceries which are often discarded after being used.
The increasing amount of plastics waste and its impact on the environment in Southeast Asia have pushed several major companies to develop new initiatives, focusing on prevention of marine plastic debris . Some Southeast Asian countries have already begun implementing measures to reduce single-use plastics.
For example, Indonesia will ban single-use plastic bags from street markets and shopping malls in its capital Jakarta by the middle of this year. In June 2019, Bali became the first Indonesian province to officially ban the single-use plastics.
Over in Thailand, the government and major retailers agreed to stop providing free single-use plastic bags, starting from January this year. Plastic bag factories slashed prices to woo retailers, according to media reports.
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