Malaysia’s local PE market dives to a decade low
Data from ChemOrbis Price Index suggest that the weekly averages of HDPE, LDPE and LLDPE film prices on FD Malaysia basis have dived to their lowest levels since 2009 following the recent round of decreases.
Sep offers indicate further drops
Late last week, a domestic producer announced its September PE offers to the local market with decreases of MYR200/ton ($47/ton) for HDPE and MYR100/ton ($24/ton) for LDPE when compared to August.
This marks the third consecutive month that the producer cut its list prices for PE grades.
Slowing demand against ample availability
Players commented that sluggish demand from end product manufacturers has been the main driver for consecutive price cuts inside the country.
“Converters still prefer to refrain from purchasing beyond their urgent needs in the face of mounting supplies. The market continues to be flooded by competitive US cargos and we expect to see even more offers from the US in the last quarter of the year,” a trader opined.
A Malaysian converter reported that he purchased a small amount of US PE at an attractive level last week just to cover his immediate needs. He said, “Considering the upcoming capacity additions both in Malaysia and in the US, we think that supplies will remain long. We are not interested in making large-scale purchases at the moment as prices might see further reductions over the near term.”
Petronas to start commercial runs in October
New PE capacities are due from the Petronas’ Pengerang Complex in Malaysia with commercial operations slated to start in the fourth quarter. The new HDPE plant has a production capacity of 400,000 tons/year while the new LLDPE capacity is 350,000 tons/year.
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