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LDPE outperforms LLDPE and HDPE across Asia

by Abdul Hadhi - ahadhi@chemorbis.com
  • 26/07/2019 (10:17)
LDPE supplies have been limited in Asia due to plant maintenance shutdowns. Demand is also considered good ahead of the high season. These factors are keeping the sentiment relatively upbeat for LDPE film in Southeast Asia and China even as weak demand pressures HDPE and LLDPE markets lower.

Import offers for LDPE in Southeast Asia were stable to slightly firmer within the weekly ranges while prices were mostly stable for both local and imported material in China.

Noting improving demand for LDPE film, a source at a Southeast Asia polymer trader said both local and import prices have firmed due to limited supply with some offers up by $5-10/ton this week. While a supplier lowered offers for HDPE and LLDPE, it kept offers for LDPE stable, a source at an end-product maker said.

Shutdowns keep LDPE relatively strong

A source at a China trading firm attributed the strength of the LDPE market, which he said was the best among PE products, to turnarounds by several producers.

There are at least three plant maintenance scheduled in China over July and August, according to Chemorbis News.

Two have planned month-long shutdowns over July and August. One has a 300,000 tons/year capacity while the other has a 270,000 tons/year capacity. The third turnaround involves 370,000 tons/year plant which will be shut for 40 days over August and September.

Similarly, there are planned turnarounds in Southeast Asia over the period. Petlin Malaysia has a planned 45-day turnaround over July and August for its 255,000 tons/year plant while another producer in Thailand was heard to be planning a short plant maintenance in August.

LDPE supply has already been limited

According to some sources,LDPE supplies have been somewhat reduced across the region not only because of plant shutdowns but also regional producers’ preference to switch to EVA production. They claimed that producing EVA has been more profitable and this pushed suppliers to switch to this product rather than LDPE, which has naturally resulted in shrinking supplies for this product.

LDPE and HDPE prices come on par in China after almost 2 years

Although HDPE prices traded with a visible premium over LDPE in the past 2 years, the weekly average of ChemOrbis Price Index suggests that they are currently almost on par. The last time they traded at the same levels was October 2017.

Before the upturn faltered in China’s PE market in mid-July, LDPE prices gained 8% in one month, whereas the increment was much smaller in HDPE film at 2.5% from mid-June to mid-July. Apparently, improved demand and limited supplies helped LDPE gain more ground than other PE products.

LDPE prices may be supported in near term

LDPE prices are likely to be supported by limited supply going into August as the bulk of the plant shutdowns will be in that month.Plus, buying interest may remain vivid ahead of the upcoming high season for agricultural films in September.

A producer based in Singapore revealed its August offers for LDPE to Indonesia with $20/ton increases, players from the region reported yesterday.
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