Initial August PP, PE prices match buyers’ expectations in SE Asia
A Southeast Asian producer reduced its August PE offers by $20/ton from July while applying decreases ranging from $40/ton to $60/ton on its new PP prices to the regional markets as of the start of this week.
Despite the fact that HDPE and LLDPE supplies are limited in some regional countries, buyers were already expecting to see decreases in import PE and PP prices for August in the face of globally weak demand and rising macroeconomic risks amid the escalating trade war between China and the US.
The ongoing rainy season in Vietnam, Thailand and the Philippines has also weighed on the demand outlook for the upcoming month.
A PE converter in Vietnam opined, “Demand towards our end products remains muted. We expect to receive lower prices from our suppliers for August.” A bag manufacturer in the country also said, “The prevailing price levels for import PP are still too high while demand remains sluggish. Hence we continue to limit our purchases to our urgent needs.”
Southeast Asia’s import PP market has been tracking a mostly softening trend since end-May in line with the start-up of new capacities in Vietnam and Malaysia. As for PE, data from ChemOrbis Price Index indicate that the weekly average of import HDPE film prices has reached its lowest level since mid-January while LLDPE has hit a one-year low.
In the upstream markets, meanwhile, spot ethylene prices in Asia have recently retreated from their seven-month high as demand has faded given the tumbling Asian currencies against the US dollar. According to players, this may also contribute to PE buyers’ ongoing softening expectations for August.
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