Local PP, PE prices extend losses in Indonesia, Vietnam as COVID-19 strikes back
Local prices hit 3-month low in Indonesia
According to the ChemOrbis Price Index, the weekly averages of HDPE and LLDPE film prices on FD Indonesia, cash excluding VAT basis are standing at $1302/ton and $1314/ton, respectively, marking around a three-month low.
As for homo-PP raffia, the weekly average prices are now standing at $1484/ton with the same terms, indicating the lowest levels since early February.
A local producer in the country has been cutting its local PP and PE offers for the past four weeks. This move has been followed by other traders in the country.
A few Indonesian traders noted, “Following a local producer’s latest price drop, we have also cut our local PP and PE offers due to weak downstream demand coupled with increasing COVID-19 cases in Southeast Asia.”
In Indonesia, demand has been hit by the Ramadan and the Eid holidays afterward, as well as rising COVID-19 fears. Southeast Asia’s most populous country has also experienced the worst COVID-19 outbreak in the region.
The largest Southeast Asian economy saw its economy contracting by 0.74% year-on-year in the first quarter of 2021. This marked the fourth straight quarter that the country reported a contraction in its economy since the coronavirus outbreak first began last year.
Some are still concerned that a surge of new cases is possible with people returning to their homes after the Eid holidays despite some government sanctions including the ban of all domestic travel from May 6 to May 17.
Local prices down for 10th week in Vietnam
ChemOrbis data also show that the weekly average of homo-PP raffia prices on FD Vietnam (VAT included) basis is currently standing at $1446/ton, losing nearly 17.5% since mid-March.
As for PE, the weekly averages of HDPE, LLDPE and LDPE, film prices on FD Vietnam (VAT included) basis are standing at $1261/ton, $1272/ton, and $1674/ton respectively. In the past ten weeks, LDPE film prices have lost 17% on average while HDPE and LLDPE film prices have retreated by 12-13%.
Vietnam has seen the fourth outbreak of COVID-19 by late April 2021. The country has brought the virus mostly under control since the beginning of the pandemic with relatively lower infection levels than other regional countries. However, the new outbreak may delay the reopening of the country’s borders and depress the economy which was displaying a cautious recovery. Vietnam’s GDP rose by 4.48% from a year earlier during the first three months of 2021.
A trader noted, “We have provided further discounts but sales of PP and PE in the local market have been limited. Buyers source based on their needs and wait for prices to drop further. We think the market has room for further decreases of $100/ton at least.”
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