LDPE film’s premium over HD climbs back above $100 in SE Asia

PE players in Southeast Asia reported that the Q2 turnarounds across the Middle East and Asia supported sentiment in the region by squeezing supply despite weak demand. LDPE film has stood out as the most affected PE grade, expanding its premium over the other film grades to around $100-130/ton. The last time LDPE carried a premium of more than $100/ton against HDPE was December 2022, according to ChemOrbis Price Index data.

LDPE continues to outperform HD and LL

In the current week, LDPE film prices from the Middle East were assessed stable to $10/ton higher compared to last week at $1120-1160/ton on CIF SEA, cash basis. ChemOrbis Price Wizard data suggest that LDPE film prices from the Middle Eastern sources, which have been on the rise for three weeks, have climbed back to the levels that were last seen nearly two months ago.

As for Middle Eastern LLDPE and HDPE film, prices for these grades were assessed stable from last week to respectively stand at $1000-1030/ton and $1020-1040/ton with the same terms. Middle Eastern HDPE film prices posted increases in the previous two weeks before stabilizing in the current week while LLDPE film has been following a stable to firmer trajectory since mid-April.

The average of the Mid-Eastern LDPE film weekly price range currently stands $110/ton above the HDPE film range for the same origin, while its premium over LLDPE film is even larger at $125/ton.



A Singapore-based trader said, “A Saudi producer has hiked LDPE offers further this week while keeping HD and LL stable. Tighter supplies from the region, coupled with higher freight costs, have meant fresh hike attempts particularly for LDPE film. The persistent weakness in demand continues to put a cap on further gains for HDPE and LLDPE. But, hopefully, with stronger economic growth recovery into latter 2024, there will be a real pricing recovery for polymers.”

Demand remains unpromising

Players across the region point to weak demand conditions with purchases remaining in small volumes based on essential requirements. “Tightening regional supply, especially from the Middle East, due to the ongoing plant turnarounds during Q2 has somewhat supported the import PE market. However, regional demand hasn’t shown a meaningful improvement, except for a small uptick in demand with limited buying activities. Converters need to replenish inventories at minimum levels. Hence, the current progressive demand destruction that the markets are undergoing appears inevitable. Producers’ inventories are climbing higher,” commented a source from a Singaporean producer.

A source from a Middle Eastern producer also highlighted the demand weakness and reported that the producer kept their offers stable for all grades. “We expect that prices will stay flat during the rest of the month,” he added.

“Market is quite slow with weak demand across all sectors. So, we opt to keep our wait-and-see approach. In the short term, it is hard for sellers to reduce their prices due to high production and shipping costs while it is also hard to issue increases on offers due to the weak demand,” noted a Vietnamese end product manufacturer.