Lockdown easing hopes help PE prices in Southeast Asia
Average LLDPE and HDPE film import prices moved up 1% and 2% over the week to $730/ton and $745/ton respectively while LDPE film prices have been stable at $845/ton, according to ChemOrbis Price Index data.
LLDPE, HDPE and LDPE film prices on a weekly basis had hit multi-year lows of $720/ton, $730/ton and $845/ton respectively the previous week.
“Prices of PE have edged up slightly as producers try to target higher levels for May in advance of key Southeast Asian countries emerging from their COVID-19 related lockdowns. Additionally, firmer prices and demand recovery have boosted market sentiment,” a source at an international producer explained.
A Singapore-based trader added, “There is talk that producers will try to increase offers for the second half of May in anticipation of an easing of lockdowns as well as more bullish China prices.”
China’s economy has staged a recovery since it relaxed its lockdown. The country’s exports grew by surprising 3.5% in April despite expectations of a drop.
Southeast Asia in various stages of easing
Countries in Southeast Asia are expected to ramp up downstream manufacturing when they emerge from the lockdown.
In Vietnam, which eased the lockdown ahead of others in the region, sellers are showing stable to slightly higher offers and are reluctant to accept lower bids.
Thailand and Malaysia have relaxed some measures, with the latter allowing nearly all economic activities to continue but with schools remaining closed and borders staying shut. The Philippines may relax some measures from May 15 while Indonesia and Singapore are expected to ease their lockdowns from June.
Recovery hopes tinged with caution
While there are hopes of Southeast Asia replicating the quick pickup in China, “There is still caution that downstream product demand and pricing may be slow to pick up and traders are seeing resistance from buyers in the form of low bids,” the Singapore trader said.
Another factor which suggests a slow and more measured pickup is the recent experience in the market, where weak demand pushed prices to new lows.
“Buyers are still cautious as recent demand for downstream products have been abysmal and will not want to be caught out if the pickup is weak,” a source at a regional producer said.
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